EXHIBIT 10.1
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CREDIT AGREEMENT
dated as of July 31, 1998,
by and among
GLOBAL IMAGING SYSTEMS, INC.
and the Material Subsidiaries thereof party hereto,
as Borrowers,
the Lenders referred to herein,
FIRST UNION NATIONAL BANK,
as Administrative Agent,
and
SCOTIABANC INC.,
as Documentation Agent
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS........................................................................................ 1
SECTION 1.1 Definitions.................................................................................. 1
SECTION 1.2 General...................................................................................... 16
SECTION 1.3 Other Definitions and Provisions............................................................. 16
ARTICLE II REVOLVING CREDIT FACILITY......................................................................... 16
SECTION 2.1 Revolving Credit Loans....................................................................... 16
SECTION 2.2 Swingline Loans.............................................................................. 17
SECTION 2.3 Procedure for Advances of Revolving Credit Loans and Swingline Loans......................... 18
SECTION 2.4 Repayment of Loans........................................................................... 19
SECTION 2.5 Notes........................................................................................ 20
SECTION 2.6 Permanent Reduction of the Aggregate Commitment.............................................. 20
SECTION 2.7 Termination of Credit Facility............................................................... 21
SECTION 2.8 Use of Proceeds.............................................................................. 21
SECTION 2.9 Security..................................................................................... 21
ARTICLE III LETTER OF CREDIT FACILITY........................................................................ 21
SECTION 3.1 L/C Commitment............................................................................... 21
SECTION 3.2 Procedure for Issuance of Letters of Credit.................................................. 22
SECTION 3.3 Commissions and Other Charges................................................................ 22
SECTION 3.4 L/C Participations........................................................................... 23
SECTION 3.5 Reimbursement Obligation of the Borrowers.................................................... 24
SECTION 3.6 Obligations Absolute......................................................................... 24
SECTION 3.7 Effect of Application........................................................................ 25
ARTICLE IV GENERAL LOAN PROVISIONS........................................................................... 25
SECTION 4.1 Interest..................................................................................... 25
SECTION 4.2 Notice and Manner of Conversion or Continuation of Loans..................................... 28
SECTION 4.3 Fees......................................................................................... 28
SECTION 4.4 Manner of Payment............................................................................ 29
SECTION 4.5 Crediting of Payments and Proceeds........................................................... 30
SECTION 4.6 Adjustments.................................................................................. 30
SECTION 4.7 Nature of Obligations of Lenders Regarding Extensions of Credit; Assumption by the
Administrative Agent........................................................................ 30
SECTION 4.8 Changed Circumstances........................................................................ 31
SECTION 4.9 Indemnity.................................................................................... 33
SECTION 4.10 Capital Requirements......................................................................... 33
SECTION 4.11 Taxes........................................................................................ 33
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ARTICLE V CLOSING; CONDITIONS OF CLOSING AND BORROWING........................................................ 35
SECTION 5.1 Closing....................................................................................... 35
SECTION 5.2 Conditions to Closing and Initial Extensions of Credit........................................ 35
SECTION 5.3 Conditions to All Loans and Letters of Credit................................................. 39
SECTION 5.4 Post-Closing Covenants........................................................................ 40
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE BORROWERS.................................................... 40
SECTION 6.1 Representations and Warranties................................................................ 40
SECTION 6.2 Survival of Representations and Warranties, Etc............................................... 47
ARTICLE VII FINANCIAL INFORMATION AND NOTICES................................................................. 47
SECTION 7.1 Financial Statements and Projections.......................................................... 47
SECTION 7.2 Officer's Compliance Certificate.............................................................. 48
SECTION 7.3 Accountants' Certificate...................................................................... 48
SECTION 7.4 Other Reports................................................................................. 49
SECTION 7.5 Notice of Litigation and Other Matters........................................................ 49
SECTION 7.6 Accuracy of Information....................................................................... 50
ARTICLE VIII AFFIRMATIVE COVENANTS............................................................................ 50
SECTION 8.1 Preservation of Corporate Existence and Related Matters....................................... 50
SECTION 8.2 Maintenance of Property....................................................................... 50
SECTION 8.3 Insurance..................................................................................... 50
SECTION 8.4 Accounting Methods and Financial Records...................................................... 51
SECTION 8.5 Payment and Performance of Obligations........................................................ 51
SECTION 8.6 Compliance With Laws and Approvals............................................................ 51
SECTION 8.7 Environmental Laws............................................................................ 51
SECTION 8.8 Compliance with ERISA......................................................................... 51
SECTION 8.9 Compliance With Agreements.................................................................... 52
SECTION 8.10 Conduct of Business........................................................................... 52
SECTION 8.11 Visits and Inspections........................................................................ 52
SECTION 8.12 Additional Borrowers and Collateral........................................................... 52
SECTION 8.13 Additional Real Property Collateral........................................................... 53
SECTION 8.14 Year 2000 Compatibility....................................................................... 53
SECTION 8.15 Interest Rate Protection...................................................................... 53
SECTION 8.16 Further Assurances............................................................................ 53
ARTICLE IX FINANCIAL COVENANTS................................................................................ 54
SECTION 9.1 Leverage Ratio................................................................................ 54
SECTION 9.2 Senior Leverage Ratio......................................................................... 54
SECTION 9.3 Fixed Charge Coverage Ratio................................................................... 54
SECTION 9.4 Minimum Net Worth............................................................................. 55
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SECTION 9.5 Limitation on Rental Pool Capital Expenditures................................................ 55
ARTICLE X NEGATIVE COVENANTS.................................................................................. 55
SECTION 10.1 Limitations on Debt........................................................................... 55
SECTION 10.2 Limitations on Guaranty Obligations........................................................... 56
SECTION 10.3 Limitations on Liens.......................................................................... 57
SECTION 10.4 Limitations on Loans, Advances, Investments and Acquisitions.................................. 58
SECTION 10.5 Limitations on Mergers and Liquidation........................................................ 62
SECTION 10.6 Limitations on Sale of Assets................................................................. 63
SECTION 10.7 Limitations on Dividends and Distributions.................................................... 63
SECTION 10.8 Limitations on Exchange and Issuance of Capital Stock......................................... 63
SECTION 10.9 Transactions with Affiliates.................................................................. 64
SECTION 10.10 Certain Accounting Changes................................................................... 64
SECTION 10.11 Amendments; Payments and Prepayments of Subordinated Debt.................................... 64
SECTION 10.12 Restrictive Agreements....................................................................... 64
ARTICLE XI DEFAULT AND REMEDIES............................................................................... 64
SECTION 11.1 Events of Default............................................................................. 64
SECTION 11.2 Remedies...................................................................................... 67
SECTION 11.3 Rights and Remedies Cumulative; Non-Waiver; etc............................................... 68
ARTICLE XII THE ADMINISTRATIVE AGENT.......................................................................... 68
SECTION 12.1 Appointment................................................................................... 68
SECTION 12.2 Delegation of Duties.......................................................................... 68
SECTION 12.3 Exculpatory Provisions........................................................................ 68
SECTION 12.4 Reliance by the Administrative Agent.......................................................... 69
SECTION 12.5 Notice of Default............................................................................. 69
SECTION 12.6 Non-Reliance on the Administrative Agent and Other Lenders.................................... 70
SECTION 12.7 Indemnification............................................................................... 70
SECTION 12.8 The Administrative Agent in Its Individual Capacity........................................... 71
SECTION 12.9 Resignation of the Administrative Agent; Successor Administrative Agent....................... 71
SECTION 12.10 Documentation Agent.......................................................................... 71
ARTICLE XIII MISCELLANEOUS.................................................................................... 71
SECTION 13.1 Notices....................................................................................... 71
SECTION 13.2 Expenses; Indemnity........................................................................... 72
SECTION 13.3 Set-off....................................................................................... 73
SECTION 13.4 Governing Law................................................................................. 73
SECTION 13.5 Consent to Jurisdiction....................................................................... 73
SECTION 13.6 Binding Arbitration; Waiver of Jury Trial..................................................... 74
SECTION 13.7 Reversal of Payments.......................................................................... 75
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SECTION 13.8 Injunctive Relief; Punitive Damages........................................................... 75
SECTION 13.9 Accounting Matters............................................................................ 75
SECTION 13.10 Successors and Assigns; Participations....................................................... 76
SECTION 13.11 Amendments, Waivers and Consents............................................................. 79
SECTION 13.12 Performance of Duties........................................................................ 79
SECTION 13.13 All Powers Coupled with Interest............................................................. 79
SECTION 13.14 Survival of Indemnities...................................................................... 79
SECTION 13.15 Titles and Captions.......................................................................... 80
SECTION 13.16 Severability of Provisions................................................................... 80
SECTION 13.17 Counterparts................................................................................. 80
SECTION 13.18 Company as Agent for the Borrowers........................................................... 80
SECTION 13.19 Obligations Joint and Several; Contribution.................................................. 80
SECTION 13.20 Term of Agreement............................................................................ 81
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EXHIBITS AND SCHEDULES
EXHIBITS
Exhibit A-1 - Form of Revolving Credit Note
Exhibit A-2 - Form of Swingline Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Notice of Account Designation
Exhibit D - Form of Notice of Prepayment
Exhibit E - Form of Notice of Conversion/Continuation
Exhibit F - Form of Officer's Compliance Certificate
Exhibit G - Form of Assignment and Acceptance
Exhibit H - Form of Pledge Agreement
Exhibit I - Form of Security Agreement
Exhibit J - Form of Joinder Agreement
SCHEDULES
Schedule 1.1(a) - Lenders and Commitments
Schedule 1.1(b) - Refinanced Debt
Schedule 5.4 - Locations of Real Property with Significant Inventory
Schedule 6.1(a) - Jurisdictions of Organization and Qualification
Schedule 6.1(b) - Subsidiaries and Capitalization
Schedule 6.1(i) - ERISA Plans
Schedule 6.1(l) - Material Contracts
Schedule 6.1(m) - Labor and Collective Bargaining Agreements
Schedule 6.1(r) - Description of Real Property
Schedule 6.1(t) - Debt and Guaranty Obligations
Schedule 6.1(u) - Litigation
Schedule 10.1 - Existing Debt Not Otherwise Permitted
Schedule 10.3(f) - Existing General Liens
Schedule 10.3(h) - Existing Vendor-Provided Financing and Trade Payable Liens
Schedule 10.4 - Existing Loans, Advances and Investments
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CREDIT AGREEMENT
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CREDIT AGREEMENT, dated as of the 31st day of July, 1998, by and among
GLOBAL IMAGING SYSTEMS, INC., a Delaware corporation (the "Company"), the
Material Subsidiaries of the Company listed on the signature pages hereto
(together with the Company, the "Initial Borrowers"), and any Additional
Borrowers who may become party to this Agreement (the "Additional Borrowers",
and together with the Initial Borrowers, the "Borrowers"), the Lenders who are
or may become a party to this Agreement (the "Lenders"), FIRST UNION NATIONAL
BANK, as Administrative Agent for the Lenders (the "Administrative Agent"), and
SCOTIABANC INC., as Documentation Agent for the Lenders (the "Documentation
Agent").
STATEMENT OF PURPOSE
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The Initial Borrowers have requested, and the Lenders have agreed, to
extend certain credit facilities to the Borrowers on the terms and conditions of
this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, such parties
hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions The following terms when used in this Agreement
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shall have the meanings assigned to them below:
"Additional Borrower" means each Material Subsidiary which hereafter
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becomes a Borrower pursuant to Section 8.12.
"Adjustment Date" shall have the meaning assigned thereto in Section
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4.1(c).
"Affiliate" means, with respect to any Person, any other Person (other than
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a Subsidiary) which directly or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, such first
Person or any of its Subsidiaries. The term "control" means (a) the power to
vote five percent (5%) or more of the securities or other equity interests of a
Person having ordinary voting power, or (b) the possession, directly or
indirectly, of any other power to direct or cause the direction of the
management and policies of a Person, whether through ownership of voting
securities, by contract or otherwise.
"Administrative Agent" means First Union in its capacity as Administrative
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Agent hereunder, and any successor thereto appointed pursuant to Section 12.9.
"Administrative Agent's Office" means the office of the Administrative
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Agent specified in or determined in accordance with the provisions of Section
13.1.
"Aggregate Commitment" means the aggregate amount of the Lenders'
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Commitments hereunder, as such amount may be reduced or modified at any time or
from time to time pursuant to the terms hereof. On the Closing Date, the
Aggregate Commitment shall be One Hundred Seventy-Five Million Dollars
($175,000,000).
"Agreement" means this Credit Agreement, as amended, restated, supplemented
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or otherwise modified.
"Applicable Law" means all applicable provisions of constitutions, laws,
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statutes, ordinances, rules, treaties, regulations, permits, licenses,
approvals, interpretations and orders of courts or Governmental Authorities and
all orders and decrees of all courts and arbitrators.
"Applicable Margin" shall have the meaning assigned thereto in Section
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4.1(c).
"Application" means an application, in the form specified by the Issuing
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Lender from time to time, requesting the Issuing Lender to issue a Letter of
Credit.
"Assignment and Acceptance" shall have the meaning assigned thereto in
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Section 13.10.
"Available Commitment" means, as to any Lender at any time, an amount equal
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to the excess, if any, of (a) such Lender's Commitment over (b) such Lender's
Extensions of Credit.
"Base Rate" means, at any time, the higher of (a) the Prime Rate or (b) the
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Federal Funds Rate plus 1/2 of 1%; each change in the Base Rate shall take
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effect simultaneously with the corresponding change or changes in the Prime Rate
or the Federal Funds Rate.
"Base Rate Loan" means any Loan bearing interest at a rate based upon the
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Base Rate as provided in Section 4.1(a).
"Borrowers" means the collective reference to the Initial Borrowers and any
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Additional Borrowers in their capacity as borrowers hereunder.
"Business Day" means (a) for all purposes other than as set forth in clause
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(b) below, any day other than a Saturday, Sunday or legal holiday on which banks
in Charlotte, North Carolina and New York, New York, are open for the conduct of
their commercial banking business, and (b) with respect to all notices and
determinations in connection with, and payments of principal and interest on,
any LIBOR Rate Loan, any day that is a Business Day described in clause (a) and
that is also a day for trading by and between banks in Dollar deposits in the
London interbank market.
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"Capital Asset" means, with respect to the Company and its Subsidiaries,
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any asset that should, in accordance with GAAP, be classified and accounted for
as a capital asset on a Consolidated balance sheet of the Company and its
Subsidiaries.
"Capital Expenditures" means, with respect to the Company and its
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Subsidiaries for any period, the aggregate cost of all Capital Assets acquired
by Company or any Subsidiary thereof during such period, as determined in
accordance with GAAP.
"Capital Lease" means, with respect to the Company and its Subsidiaries,
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any lease of any property that should, in accordance with GAAP, be classified
and accounted for as a capital lease on a Consolidated balance sheet of the
Company and its Subsidiaries.
"Cash Equivalents" shall have the meaning given thereto in Section 10.4(b).
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"Change in Control" shall have the meaning assigned thereto in Section
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11.1(i).
"Closing Date" means the date of this Agreement or such later Business Day
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upon which each condition described in Article V shall be satisfied or waived in
all respects in a manner acceptable to the Administrative Agent, in its sole
discretion.
"Code" means the Internal Revenue Code of 1986, and the rules and
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regulations thereunder, each as amended, supplemented or otherwise modified.
"Collateral" means any collateral pledged by any Borrower, an equityholder
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of any Borrower, or any Subsidiary of any Borrower, to the Administrative Agent
for the ratable benefit of the Administrative Agent and the Lenders, in order to
secure the Obligations or any portion thereof.
"Commitment" means, as to any Lender, the obligation of such Lender to make
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Revolving Credit Loans and issue or participate in Letters of Credit and
participate in Swingline Loans hereunder in an aggregate principal or face
amount at any time outstanding not to exceed the amount set forth opposite such
Lender's name on Schedule 1.1(a) hereto, as the same may be reduced or modified
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at any time or from time to time pursuant to the terms hereof.
"Commitment Fee Rate" shall have the meaning assigned thereto in Section
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4.3(a).
"Commitment Percentage" means, as to any Lender at any time, the ratio of
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(a) the amount of the Commitment of such Lender to (b) the Aggregate Commitment
of all of the Lenders.
"Company" shall have the meaning assigned thereto in the preamble to this
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Agreement.
"Consolidated" means, when used with reference to financial statements or
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financial statement items of the Company and its Subsidiaries, such statements
or items on a consolidated basis in accordance with applicable principles of
consolidation under GAAP.
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"Credit Facility" means the collective reference to the Revolving Credit
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Facility and the L/C Facility.
"Debt" means, with respect to the Company and its Subsidiaries at any date
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and without duplication, the sum of the following calculated on a Consolidated
basis in accordance with GAAP: (a) all liabilities, obligations and
indebtedness for borrowed money including but not limited to obligations
evidenced by bonds, debentures, notes or other similar instruments of any such
Person, (b) all obligations to pay the deferred purchase price of property or
services of any such Person, except obligations with respect to (i) Vendor-
Provided Financing and (ii) Trade Payables and all other trade payables arising
in the ordinary course of business which are not more than ninety (90) days past
due (provided that commencing sixty (60) days after the Closing Date, Debt shall
include any Vendor-Provided Financing or other trade credit in each case
referred to in Section 5.4(b) with respect to which an intercreditor agreement
has not been executed as provided in such Section 5.4(b)), (c) all obligations
of any such Person as lessee under Capital Leases, (d) all Debt of any other
Person secured by a Lien on any asset of any such Person, (e) all Guaranty
Obligations of any such Person, and (f) all obligations, contingent or
otherwise, of any such Person relative to the face amount of letters of credit,
whether or not drawn, including without limitation any Reimbursement Obligation,
and banker's acceptances issued for the account of any such Person.
"Default" means any of the events specified in Section 11.1 which with the
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passage of time, the giving of notice or any other condition, would constitute
an Event of Default.
"Documentation Agent" means Scotiabanc Inc. in its capacity as
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Documentation Agent hereunder.
"Dollars" or "$" means, unless otherwise qualified, dollars in lawful
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currency of the United States.
"EBITDA" means, with respect to the Company and its Subsidiaries for any
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period, the following calculated without duplication for such period on a
Consolidated basis in accordance with GAAP: (a) Net Income plus (b) the sum of
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the following, in each case to the extent deducted in the determination of Net
Income, (i) income and franchise tax provisions by the Company and its
Subsidiaries, (ii) Interest Expense, (iii) amortization, depreciation and other
non-cash charges (including amortization of goodwill, covenants not to compete
and other intangible assets).
"Eligible Assignee" means, with respect to any assignment of the rights,
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interest and obligations of a Lender hereunder, a Person that is at the time of
such assignment (a) a commercial bank organized under the laws of the United
States or any state thereof, having combined capital and surplus in excess of
$500,000,000, (b) a commercial bank organized under the laws of any other
country that is a member of the Organization of Economic Cooperation and
Development, or a political subdivision of any such country, having combined
capital and surplus in excess of $500,000,000, (c) a finance company, insurance
company or other financial
4
institution which in the ordinary course of business extends credit of the type
extended hereunder and that has total assets in excess of $1,000,000,000, (d)
already a Lender hereunder (whether as an original party to this Agreement or as
the assignee of another Lender), (e) the successor (whether by transfer of
assets, merger or otherwise) to all or substantially all of the commercial
lending business of the assigning Lender, or (f) any other Person that has been
approved in writing as an Eligible Assignee by the BorrowerS and the
Administrative Agent.
"Employee Benefit Plan" means any employee benefit plan within the meaning
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of Section 3(3) of ERISA which (a) is maintained for employees of any Borrower
or any ERISA Affiliate or (b) has at any time within the preceding six years
been maintained for the employees of any Borrower or any current or former ERISA
Affiliate.
"Environmental Laws" means any and all federal, state and local laws,
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statutes, ordinances, rules, regulations, permits, licenses, approvals,
interpretations and orders of courts or Governmental Authorities, relating to
the protection of human health or the environment, including, but not limited
to, requirements pertaining to the manufacture, processing, distribution, use,
treatment, storage, disposal, transportation, handling, reporting, licensing,
permitting, investigation or remediation of Hazardous Materials.
"ERISA" means the Employee Retirement Income Security Act of 1974, and the
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rules and regulations thereunder, each as amended, supplemented or otherwise
modified.
"ERISA Affiliate" means any Person who together with any Borrower is
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treated as a single employer within the meaning of Section 414(b), (c), (m) or
(o) of the Code or Section 4001(b) of ERISA.
"Eurodollar Reserve Percentage" means, for any day, the percentage
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(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) which is in effect for such day as prescribed by the Federal
Reserve Board (or any successor) for determining the maximum reserve requirement
(including without limitation any basic, supplemental or emergency reserves) in
respect of Eurocurrency liabilities or any similar category of liabilities for a
member bank of the Federal Reserve System in New York City.
"Event of Default" means any of the events specified in Section 11.1,
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provided that any requirement for passage of time, giving of notice, or any
other condition, has been satisfied.
"Extensions of Credit" means, as to any Lender at any time, an amount equal
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to the sum of (a) the aggregate principal amount of all Revolving Credit Loans
made by such Lender then outstanding, (b) such Lender's Commitment Percentage of
the L/C Obligations then outstanding and (c) such Lender's Commitment Percentage
of the Swingline Loans then outstanding.
"FDIC" means the Federal Deposit Insurance Corporation, or any successor
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thereto.
"Federal Funds Rate" means, the rate per annum (rounded upwards, if
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necessary, to the next higher 1/100th of 1%) representing the daily effective
federal funds rate as quoted by the
5
Administrative Agent and confirmed in Federal Reserve Board Statistical Release
H.15 (519) or any successor or substitute publication selected by the
Administrative Agent. If, for any reason, such rate is not available, then
"Federal Funds Rate" shall mean a daily rate which is determined, in the opinion
of the Administrative Agent, to be the rate at which federal funds are being
offered for sale in the national federal funds market at 9:00 a.m. (Charlotte
time). Rates for weekends or holidays shall be the same as the rate for the most
immediate preceding Business Day.
"Fee Letter" means the separate fee letter agreement executed by the
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Company, FUCMG and First Union dated April 22, 1998.
"First Union" means First Union National Bank, a national banking
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association, and its successors.
"Fiscal Year" means the fiscal year of the Company and its Subsidiaries
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ending on March 31.
"Fixed Charges" means, with respect to the Company and its Subsidiaries for
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any period, the sum of the following for such period calculated on a
Consolidated basis in accordance with GAAP: (a) income and franchise taxes paid
or payable during such period, (b) Interest Expense paid or payable during such
period, (c) scheduled principal payments paid or payable during such period with
respect to any Debt (including, without limitation, the principal portion of
payments attributable to Capital Leases), (d) Capital Expenditures paid or
payable during such period (excluding (i) Capital Expenditures constituting part
of a Permitted Acquisition and (ii) Rental Pool Capital Expenditures) and (e)
Rental Expense paid or payable during such period.
"FUCMG" means First Union Capital Markets Group, a division of Wheat First
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Securities, Inc., and its successors.
"Funded Debt" means, with respect to the Company and its Subsidiaries on
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any date, all Debt of such Persons calculated on a Consolidated basis.
"GAAP" means generally accepted accounting principles, as recognized by the
----
American Institute of Certified Public Accountants and the Financial Accounting
Standards Board, consistently applied and maintained on a consistent basis for
the Company and its Subsidiaries throughout the period indicated and consistent
with the prior financial practice of the Company and its Subsidiaries.
"Governmental Approvals" means all authorizations, consents, approvals,
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licenses and exemptions of, registrations and filings with, and reports to, all
Governmental Authorities.
"Governmental Authority" means any nation, province, state or political
----------------------
subdivision thereof, and any government or any Person exercising executive,
legislative, regulatory or administrative functions of or pertaining to
government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
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"Guaranty Obligation" means, with respect to the Company and its
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Subsidiaries, without duplication, any obligation, contingent or otherwise, of
any such Person pursuant to which such Person has directly or indirectly
guaranteed any Debt or other obligation of any other Person and, without
limiting the generality of the foregoing, any obligation, direct or indirect,
contingent or otherwise, of any such Person (a) to purchase or pay (or advance
or supply funds for the purchase or payment of) such Debt or other obligation
(whether arising by virtue of partnership arrangements, by agreement to keep
well, to purchase assets, goods, securities or services, to take-or-pay, or to
maintain financial statement condition or otherwise) or (b) entered into for the
purpose of assuring in any other manner the obligee of such Debt or other
obligation of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part); provided, that the term Guaranty
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Obligation shall not include endorsements for collection or deposit in the
ordinary course of business.
"Hazardous Materials" means any substances or materials (a) which are or
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become defined as hazardous wastes, hazardous substances, pollutants,
contaminants, chemical substances or mixtures or toxic substances under any
Applicable Law, (b) which are toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic or otherwise harmful to human
health or the environment and are or become regulated by any Governmental
Authority, (c) the presence of which require investigation or remediation under
any Applicable Law, (d) the discharge or emission or release of which requires a
permit or license under any Applicable Law or other Governmental Approval, (e)
which are deemed to constitute a nuisance, a trespass or pose a health or safety
hazard to persons or neighboring properties, (f) which consist of underground or
aboveground storage tanks, whether empty, filled or partially filled with any
substance, or (g) which contain, without limitation, asbestos, polychlorinated
biphenyls, urea formaldehyde foam insulation, petroleum hydrocarbons, petroleum
derived substances or waste, crude oil, nuclear fuel, natural gas or synthetic
gas.
"Hedging Agreement" means any agreement with respect to an interest rate or
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currency swap, collar, cap, floor or a forward rate agreement or other agreement
regarding the hedging of interest rate risk exposure or foreign currency
exposure of any Borrower or any Subsidiary thereof, and any confirming letter
executed pursuant to such hedging agreement, all as amended, restated,
supplemented or otherwise modified.
"Initial Borrowers" shall have the meaning assigned thereto in the preamble
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to this Agreement.
"Interest Expense" means, with respect to the Company and its Subsidiaries
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for any period, the total interest expense (including, without limitation,
interest expense attributable to Capital Leases and all net obligations pursuant
to Hedging Agreements, but excluding amortization of financing fees) of such
Persons, all determined for such period on a Consolidated basis in accordance
with GAAP.
"Interest Period" shall have the meaning assigned thereto in Section
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4.1(b).
"Inventory" shall have the meaning assigned thereto in the Security
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Agreement.
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"Issuer" shall have the meaning assigned thereto in the Pledge Agreement.
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"Issuing Lender" means First Union, in its capacity as issuer of any Letter
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of Credit, or any successor.
"Joinder Agreement" means any Joinder Agreement executed by a Material
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Subsidiary of any Borrower pursuant to Section 8.12 in favor of Administrative
Agent for the ratable benefit of the Administrative Agent and the Lenders and
substantially in the form of Exhibit J, as amended, restated, supplemented or
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otherwise modified.
"L/C Commitment" means Five Million Dollars ($5,000,000).
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"L/C Facility" means the letter of credit facility established pursuant to
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Article III hereof.
"L/C Obligations" means at any time, an amount equal to the sum of (a) the
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aggregate undrawn and unexpired amount of the then outstanding Letters of Credit
and (b) the aggregate amount of drawings under Letters of Credit which have not
then been reimbursed pursuant to Section 3.5.
"L/C Participants" means the collective reference to all the Lenders other
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than the Issuing Lender.
"L/C Facility Termination Date" means the earlier to occur of (a) the
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resignation of First Union as Administrative Agent in accordance with Section
12.9 and (b) the Revolving Credit Termination Date.
"Lender" means each Person executing this Agreement as a Lender set forth
------
on the signature pages hereto and each Person that hereafter becomes a party to
this Agreement as a Lender pursuant to Section 13.10.
"Lending Office" means, with respect to any Lender, the office of such
--------------
Lender maintaining such Lender's Commitment Percentage of the Loans.
"Letters of Credit" shall have the meaning assigned thereto in Section 3.1.
-----------------
"Leverage Ratio" means the ratio calculated in accordance with Section 9.1.
--------------
"LIBOR" means the rate of interest per annum determined on the basis of the
-----
rate for deposits in Dollars in a minimum amount of at least $5,000,000 for a
period equal to the applicable Interest Period which appears on the Telerate
Page 3750 (or any successor) at approximately 11:00 a.m. (London time) two (2)
Business Days prior to the first day of the applicable Interest Period (rounded
upward, if necessary, to the nearest one-sixteenth of one percent (1/16%)). If,
for any reason, such rate does not appear on Telerate Page 3750, then "LIBOR"
shall be determined by the Administrative Agent to be the arithmetic average
(rounded
8
upward, if necessary, to the nearest one-sixteenth of one percent (1/16%)) of
the rate per annum at which deposits in Dollars would be offered by first class
banks in the London interbank market to the Administrative Agent approximately
11:00 a.m. (London time) two (2) Business Days prior to the first day of the
applicable Interest Period for a period equal to such Interest Period and in an
amount substantially equal to the amount of the applicable Loan.
"LIBOR Rate" means a rate per annum (rounded upwards, if necessary, to the
----------
next higher 1/100th of 1%) determined by the Administrative Agent pursuant to
the following formula:
LIBOR Rate = LIBOR
------------------------------------
1.00 - Eurodollar Reserve Percentage
"LIBOR Rate Loan" means any Loan bearing interest at a rate based upon the
---------------
LIBOR Rate as provided in Section 4.1(a).
"Lien" means, with respect to any asset, any mortgage, lien pledge, charge,
----
security interest or encumbrance of any kind in respect of such asset. For the
purposes of this Agreement, a Person shall be deemed to own subject to a Lien
any asset which it has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, Capital Lease or other title
retention agreement relating to such asset.
"Loans" means the collective reference to the Revolving Credit Loans and
-----
the Swingline Loans and "Loan" means any of such Loans.
"Loan Documents" means, collectively, this Agreement, the Notes, the
--------------
Applications, the Letters of Credit, the Security Documents and each other
document, instrument and agreement executed and delivered by any Borrower, any
Subsidiary thereof or their counsel in connection with this Agreement or
otherwise referred to herein or contemplated hereby, all as may be amended,
restated, supplemented or otherwise modified.
"Material Adverse Effect" means, with respect to the Company and its
-----------------------
Subsidiaries, a material adverse effect on the properties, business, prospects,
operations or condition (financial or otherwise) of such Persons, taken as a
whole, or the ability of such Persons, taken as a whole, to perform its
obligations under the Loan Documents or Material Contracts, in each case to
which it is a party.
"Material Contract" means (a) any contract or other agreement, written or
-----------------
oral, of any Borrower or any of its Subsidiaries involving monetary liability of
or to any such Person in an amount in excess of $1,000,000 per annum, or (b) any
other contract or agreement, written or oral, of any Borrower or any of its
Subsidiaries the failure to comply with which could reasonably be expected to
have a Material Adverse Effect.
"Material Subsidiary" means, for any period of four (4) consecutive
-------------------
fiscal quarters, (a) any Subsidiary of any Borrower with Pro Forma Adjusted
EBITDA in excess of five percent (5%) of the Consolidated Pro Forma Adjusted
EBITDA of the Company and its Subsidiaries for
9
such period as reflected on the financial statements delivered in accordance
with Section 7.1, (b) any parent of any Subsidiary referred to in clause (a) of
this definition, which parent is also a Subsidiary and which parent is not
deemed a "Material Subsidiary" pursuant to clause (a) of this definition, (c)
any Subsidiary of any Borrower voluntarily designated in writing to the Agent by
any Borrower as a "Material Subsidiary" regardless of whether such Subsidiary is
deemed a "Material Subsidiary" pursuant to clause (a) or (b) of this definition
and (d) any Subsidiary of any Borrower executing either this Agreement or all
relevant joinder documents in compliance with Section 8.12 regardless of whether
such Subsidiary is deemed a "Material Subsidiary" pursuant to clause (a), (b) or
(c) of this definition; provided, however, that notwithstanding the foregoing
the Subsidiaries of the Borrowers which comprise "Material Subsidiaries" at all
times shall have Pro Forma Adjusted EBITDA for any period of four (4)
consecutive fiscal quarters equal to not less than ninety percent (90%) of
Consolidated Pro Forma Adjusted EBITDA for such period. The Material
Subsidiaries of the Borrowers as of the Closing Date are designated on Schedule
--------
6.1(b).
------
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
------------------
4001(a)(3) of ERISA to which any Borrower or any ERISA Affiliate is making, or
is accruing an obligation to make, contributions within the preceding six years.
"Net Cash Proceeds" means, as applicable, (a) with respect to any sale or
-----------------
other disposition of assets, the gross cash proceeds received by a Borrower or
any of its Subsidiaries from such sale less the sum of (i) all income taxes
----
and other taxes assessed by a Governmental Authority as a result of such sale
and any other reasonable fees and expenses incurred in connection therewith and
(ii) the principal amount of, premium, if any, and interest on any Debt secured
by a Lien on the asset (or a portion thereof) sold, which Debt is required to be
and is repaid in connection with such sale, (b) with respect to any payment
under an insurance policy or in connection with a condemnation proceeding, the
amount of cash proceeds received by a Borrower or its Subsidiaries from an
insurance company or Governmental Authority net of all reasonable expenses of
collection and (c) with respect to any issuance or offering of equity securities
and for purposes of Section 9.4, the gross cash proceeds received by a Borrower
or any of its Subsidiaries therefrom less all legal, underwriting and other
----
reasonable fees and expenses incurred in connection therewith.
"Net Income" means, with respect to the Company and its Subsidiaries for
----------
any period, the net income (or loss) thereof for such period determined on a
Conso lidated basis in accordance with GAAP; provided, that there shall be
--------
excluded from net income (or loss): (a) the income (or loss) of any Person
(other than a Wholly-Owned Subsidiary of the Company) in which the Company or
any Subsidiary has an ownership interest unless received by any such Person in a
cash distribution and (b) to the extent not included in clause (a) above, any
after-tax extraordinary gains or losses.
"Net Worth" means, at any date of determination, the total stockholders'
---------
equity (including capital stock, additional paid-in capital and retained
earnings after deducting the treasury stock) of the Company and its Subsidiaries
appearing on a Consolidated balance sheet of
10
the Company and its Subsidiaries and calculated on a Consolidated basis in
accordance with GAAP.
"Notes" means the collective reference to the Revolving Credit Notes
-----
and Swingline Note and "Note" means any of such Notes.
"Notice of Account Designation" shall have the meaning assigned thereto in
-----------------------------
Section 2.3(b).
"Notice of Borrowing" shall have the meaning assigned thereto in Section
-------------------
2.3(a).
"Notice of Conversion/Continuation" shall have the meaning assigned thereto
---------------------------------
in Section 4.2.
"Notice of Prepayment" shall have the meaning assigned thereto in Section
--------------------
2.4(c).
"Obligations" means, in each case, whether now in existence or hereafter
-----------
arising: (a) the principal of and interest on (including interest accruing after
the filing of any bankruptcy or similar petition) the Loans, (b) the L/C
Obligations, and (c) all other fees and commissions (including attorney's fees),
charges, indebtedness, loans, liabilities, financial accommodations,
obligations, covenants and duties owing by any Borrower to any Lender or the
Administrative Agent, of every kind, nature and description, direct or indirect,
absolute or contingent, due or to become due, contractual or tortious,
liquidated or unliquidated, and whether or not evidenced by any note, in each
case for the payment of money under or in respect of this Agreement, any Note,
any Letter of Credit, any of the other Loan Documents or any Hedging Agreement
hedging interest rate exposure under this Agreement.
"Officer's Compliance Certificate" shall have the meaning assigned thereto
--------------------------------
in Section 7.2.
"Other Taxes" shall have the meaning assigned thereto in Section 4.11(b).
-----------
"Partnership/LLC" shall have the meaning assigned thereto in the Pledge
---------------
Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
----
agency.
"Pension Plan" means any Employee Benefit Plan, other than a Multiemployer
------------
Plan, which is subject to the provisions of Title IV of ERISA or Section 412 of
the Code and which (a) is maintained for employees of any Borrower or any ERISA
Affiliates or (b) has at any time within the preceding six years been maintained
for the employees of any Borrower or any of their current or former ERISA
Affiliates.
"Permitted Acquisition" means any acquisition permitted by Section 10.4(e)
----------------------
hereof.
11
"Permitted Acquisition Value" means the aggregate amount of the purchase
---------------------------
price (including, without limitation, any assumed debt, earn-outs and deferred
payments (to the extent a fixed and determinable obligation is incurred), or
capital stock of the acquiree, net of the applicable acquired company's cash
(including Cash Equivalents) balance as shown on the most recent financial
statements of the acquired company delivered in connection with the applicable
Permitted Acquisition) to be paid in connection with any applicable Permitted
Acquisition as set forth in the applicable stock or asset purchase documents
executed by any Borrower or any Subsidiary thereof in order to consummate the
applicable Permitted Acquisition.
"Person" means an individual, corporation, limited liability company,
------
partnership, association, trust, business trust, joint venture, joint stock
company, pool, syndicate, sole proprietorship, unincorporated organization,
Governmental Authority or any other form of entity or group thereof.
"Pledge Agreement" means the pledge agreement executed by the Borrowers in
----------------
favor of the Administrative Agent for the ratable benefit of itself and the
other Lenders, substantially in the form of Exhibit H , as amended, restated,
---------
supplemented or otherwise modified.
"Prime Rate" means, at any time, the rate of interest per annum publicly
----------
announced from time to time by First Union as its prime rate. Each change in the
Prime Rate shall be effective as of the opening of business on the day such
change in the Prime Rate occurs. The parties hereto acknowledge that the rate
announced publicly by First Union as its Prime Rate is an index or base rate and
shall not necessarily be its lowest or best rate charged to its customers or
other banks.
"Pro Forma Adjusted EBITDA" means, with respect to the Company and its
-------------------------
Subsidiaries for any period, EBITDA calculated on a pro forma basis to include
as of the first day of such period any Permitted Acquisition. For the purposes
hereof, Pro Forma Adjusted EBITDA shall be adjusted to reflect any non-recurring
costs and any extraordinary expenses of any Permitted Acquisition and any
permitted divestiture in a manner satisfactory to the Administrative Agent (with
respect to any Permitted Acquisition that does not require the consent of the
Required Lenders pursuant to Section 10.4(e) of this Agreement) and in a manner
satisfactory to the Administrative Agent and the Required Lenders (with respect
to any Permitted Acquisition that requires the consent of the Agent and the
Required Lenders pursuant to Section 10.4(e) of this Agreement and with respect
to any permitted divestiture). These adjustments shall be consistent with the
adjustments made in the financial information delivered to the Agent and Lenders
as of the Closing Date and may include, but not be limited to, management
compensation in excess of historical compensation levels respecting the acquired
Person (including, without limitation, perquisites in excess of historical
levels) to be paid by the Company or any of its Subsidiaries following any
Permitted Acquisition, fees for professional services in excess of historical
levels after any such Permitted Acquisition, expenses incurred in connection
with any such Permitted Acquisition and such other similar additional expenses
incurred after any such Permitted Acquisition.
12
"Real Property Security Documents" means any mortgage, deed of trust,
--------------------------------
leasehold mortgage, leasehold deed of trust, landlord agreement and other
agreement or writing pursuant to which any Borrower or any Subsidiary thereof
grants a security interest in any real property interest securing the
Obligations.
"Refinanced Debt" means all Debt and other obligations of the Borrowers set
---------------
forth on Schedule 1.1(b) attached hereto.
---------------
"Register" shall have the meaning assigned thereto in Section 13.10(d).
--------
"Reimbursement Obligation" means the obligation of the Borrowers to
------------------------
reimburse the Issuing Lender pursuant to Section 3.5 for amounts drawn under
Letters of Credit.
"Rental Expense" means, with respect to the Company and its Subsidiaries
--------------
for any period, all lease and rental expenses of such Persons with respect to
any operating lease or rental agreement for real property for such period, all
determined for such period on a Consolidated basis in accordance with GAAP.
"Rental Pool Capital Expenditures" means, with respect to the Company and
--------------------------------
its Subsidiaries for any period, all expenditures of such Persons which are made
in connection with the acquisition, replacement or repair of any equipment that
will be revenue producing and rented to customers of such Persons for, with
respect to any new equipment, an initial term of at least one (1) year, all
determined for such period on a Consolidated basis in accordance with GAAP.
"Required Lenders" means, at any date, any combination of holders of at
----------------
least fifty-one percent (51%) of the Extension of Credit, or if no Extensions of
Credit are outstanding, any combination of Lenders whose Commitment Percentages
aggregate at least fifty-one percent (51%); provided that Lenders" shall at all
times be comprised of at least two (2) Lenders.
"Responsible Officer" means any of the following: the chief executive
-------------------
officer or chief financial officer of the Company or any other officer of the
Company reasonably acceptable to the Administrative Agent.
"Revolving Credit Facility" means the revolving credit and swingline
-------------------------
facility established pursuant to Article II hereof.
"Revolving Credit Loans" means any revolving loan made to any Borrower
----------------------
pursuant to Section 2.1, and all such revolving loans collectively as the
context requires.
"Revolving Credit Notes" means the collective reference to the Revolving
----------------------
Credit Notes made by the Borrowers payable to the order of each Lender,
substantially in the form of Exhibit A-1 hereto, evidencing the Revolving Credit
-----------
Facility, and any amendments and modifications thereto, any substitutes
therefor, and any replacements, restatements, renewals or extension thereof, in
whole or in part; "Revolving Credit Note" means any of such Revolving Credit
Notes.
13
"Revolving Credit Termination Date" means the earliest of the dates
---------------------------------
referred to in Section 2.7.
"Security Agreement" means the security agreement executed by the Borrowers
------------------
in favor of the Administrative Agent for the ratable benefit of itself and the
other Lenders, substantially in the form of Exhibit I , as amended, restated,
---------
supplemented or otherwise modified.
"Security Documents" means the collective reference to the Security
------------------
Agreement, the Pledge Agreement, the Real Property Security Documents, any
intellectual property security agreements and each other agreement or writing
pursuant to which any Borrower or any Subsidiary thereof purports to pledge or
grant a security interest in any property or assets securing the Obligations or
any such Person purports to guaranty the payment and/or performance of the
Obligations.
"Senior Funded Debt" means, with respect to the Company and its
------------------
Subsidiaries on any date, Funded Debt of such Persons minus Funded Debt of such
-----
Persons which constitutes Subordinated Debt.
"Solvent" means, as to any Borrower or any of its Subsidiaries on a
-------
particular date, that any such Person (a) has capital sufficient to carry on its
business and transactions and all business and transactions in which it is about
to engage and is able to pay its debts as they mature, (b) owns property having
a value, both at fair valuation and at present fair saleable value on a going
concern basis, greater than the amount required to pay its probable liabilities
(including contingencies), and (c) does not believe that it will incur debts or
liabilities beyond its ability to pay such debts or liabilities as they mature.
"Subordinated Debt" means any other Debt of any Borrower or any Subsidiary
-----------------
thereof subordinated in right and time of payment to the Obligations on terms
satisfactory to the Required Lenders.
"Subsidiary" means as to any Person, any corporation, partnership, limited
----------
liability company or other entity of which more than fifty percent (50%) of the
outstanding capital stock or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other managers of such
corporation, partnership, limited liability company or other entity is at the
time, directly or indirectly, owned by or the management is otherwise controlled
by such Person (irrespective of whether, at the time, capital stock or other
ownership interests of any other class or classes of such corporation,
partnership, limited liability company or other entity shall have or might have
voting power by reason of the happening of any contingency). Unless otherwise
qualified references to "Subsidiary" or "Subsidiaries" herein shall refer to
those of the Company.
"Subsidiary Borrowers" means any Material Subsidiary of the Company which
--------------------
is a Borrower hereunder.
14
"Swingline Commitment" means Five Million Dollars ($5,000,000).
--------------------
"Swingline Lender" means First Union in its capacity as swingline lender
----------------
hereunder.
"Swingline Loan" means any swingline loan made by the Swingline Lender to
--------------
the Borrowers pursuant to Section 2.2, and all such swingline loans collectively
as the context requires.
"Swingline Note" means the Swingline Note made by the Borrowers payable to
--------------
the order of the Swingline Lender, substantially in the form of Exhibit A-2
-----------
hereto, evidencing the Swingline Loans, and any amendments and modifications
thereto, any substitutes therefor, and any replacements, restatements, renewals
or extension thereof, in whole or in part.
"Swingline Termination Date" means the earlier to occur of (a) the
--------------------------
resignation of First Union as Administrative Agent in accordance with Section
12.9 and (b) the Revolving Credit Termination Date.
"Taxes" shall have the meaning assigned thereto in Section 4.11(a).
-----
"Termination Event" means: (a) a "Reportable Event" described in Section
-----------------
4043 of ERISA, or (b) the withdrawal of any Borrower or any ERISA Affiliate from
a Pension Plan during a plan year in which it was a "substantial employer" as
defined in Section 4001(a)(2) of ERISA, or (c) the termination of a Pension
Plan, the filing of a notice of intent to terminate a Pension Plan or the
treatment of a Pension Plan amendment as a termination under Section 4041 of
ERISA, or (d) the institution of proceedings to terminate, or the appointment of
a trustee with respect to, any Pension Plan by the PBGC, or (e) any other event
or condition which would constitute grounds under Section 4042(a) of ERISA for
the termination of, or the appointment of a trustee to administer, any Pension
Plan, or (f) the partial or complete withdrawal of any Borrower or any ERISA
Affiliate from a Multiemployer Plan, or (g) the imposition of a Lien pursuant to
Section 412 of the Code or Section 302 of ERISA, or (h) any event or condition
which results in the reorganization or insolvency of a Multiemployer Plan under
Sections 4241 or 4245 of ERISA, or (i) any event or condition which results in
the termination of a Multiemployer Plan under Section 4041A of ERISA or the
institution by PBGC of proceedings to terminate a Multiemployer Plan under
Section 4042 of ERISA.
"Trade Payables" means trade payables of the Company and its Subsidiaries
--------------
(other than Vendor-Provided Financing) arising in the ordinary course of
business which are not more than thirty (30) days past due.
"Uniform Customs" the Uniform Customs and Practice for Documentary Credits
---------------
(1994 Revision), International Chamber of Commerce Publication No. 500.
"UCC" means the Uniform Commercial Code as in effect in the State of North
---
Carolina.
"United States" means the United States of America.
-------------
15
"Vendor-Provided Financing" means financing provided to the Company and its
-------------------------
Subsidiaries arising in the ordinary course of business in order to finance the
purchase of Inventory thereby, which financing (i) is provided either directly
by the corresponding vendor or a third party financial institution or
"aggregator" to whom the vendor has transferred title to the financed Inventory
and (ii) is payable within one hundred and twenty (120) days of the invoice date
thereof.
"Wholly-Owned" means, with respect to a Subsidiary, that all of the shares
------------
of capital stock or other ownership interests of such Subsidiary are, directly
or indirectly, owned or controlled by any Borrower and/or one or more of its
Wholly-Owned Subsidiaries.
SECTION 1.2 General. Unless otherwise specified, a reference in this
-------
Agreement to a particular section, subsection, Schedule or Exhibit is a
reference to that section, subsection, Schedule or Exhibit of this Agreement.
Wherever from the context it appears appropriate, each term stated in either the
singular or plural shall include the singular and plural, and pronouns stated in
the masculine, feminine or neuter gender shall include the masculine, the
feminine and the neuter. Any reference herein to "Charlotte time" shall refer to
the applicable time of day in Charlotte, North Carolina.
SECTION 1.3 Other Definitions and Provisions.
(a) Use of Capitalized Terms. Unless otherwise defined therein, all
------------------------
capitalized terms defined in this Agreement shall have the defined meanings when
used in this Agreement, the Notes and the other Loan Documents or any
certificate, report or other document made or delivered pursuant to this
Agreement.
(b) Miscellaneous. The words "hereof", "herein" and "hereunder" and
-------------
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.
ARTICLE II
REVOLVING CREDIT FACILITY
SECTION 2.1 Revolvingt Credit Loans. Subject to the terms and conditions of
-----------------------
this Agreement, each Lender severally agrees to make Revolving Credit Loans to
the Borrowers on a joint and several basis from time to time from the Closing
Date through the Revolving Credit Termination Date as requested by the Company,
on behalf of the Borrowers, in accordance with the terms of Section 2.3;
provided, that (a) the aggregate principal amount of all outstanding Revolving
--------
Credit Loans (after giving effect to any amount requested) shall not exceed the
Aggregate Commitment less the sum of all outstanding Swingline Loans and L/C
----
Obligations and (b) the principal amount of outstanding Revolving Credit Loans
from any Lender to the Borrowers shall not at any time exceed such Lender's
Available Commitment.
16
Each Revolving Credit Loan by a Lender shall be in a principal amount equal to
such Lender's Commitment Percentage of the aggregate principal amount of
Revolving Credit Loans requested on such occasion. Subject to the terms and
conditions hereof, the Borrowers may borrow, repay and reborrow Revolving Credit
Loans hereunder until the Revolving Credit Termination Date.
SECTION 2.2 Swingline Loans.
---------------
(a) Availability. Subject to the terms and conditions of this Agreement,
------------
the Swingline Lender agrees to make Swingline Loans to the Borrowers from time
to time from the Closing Date through, but not including, the Swingline
Termination Date; provided, that the aggregate principal amount of all
--------
outstanding Swingline Loans (after giving effect to any amount requested), shall
not exceed the lesser of (i) the Aggregate Commitment less the sum of all
outstanding Revolving Credit Loans and L/C Obligations and (ii) the Swingline
Commitment.
(b) Refunding.
---------
(i) Swingline Loans shall be refunded by the Lenders on demand by the
Swingline Lender. Such refundings shall be made by the Lenders in accordance
with their respective Commitment Percentages and shall thereafter be reflected
as Revolving Credit Loans of the Lenders on the books and records of the
Administrative Agent. Each Lender shall fund its respective Commitment
Percentage of Revolving Credit Loans as required to repay Swingline Loans
outstanding to the Swingline Lender upon demand by the Swingline Lender but in
no event later than 2:00 p.m. (Charlotte time) on the next succeeding Business
Day after such demand is made. No Lender's obligation to fund its respective
Commitment Percentage of a Swingline Loan shall be affected by any other
Lender's failure to fund its Commitment Percentage of a Swingline Loan, nor
shall any Lender's Commitment Percentage be increased as a result of any such
failure of any other Lender to fund its Commitment Percentage.
(ii) The Borrowers shall pay to the Swingline Lender on demand the
amount of such Swingline Loans to the extent amounts received from the Lenders
are not sufficient to repay in full the outstanding Swingline Loans requested or
required to be refunded. In addition, the Borrowers hereby authorize the
Administrative Agent to charge any account maintained with the Swingline Lender
(up to the amount available therein) in order to immediately pay the Swingline
Lender the amount of such Swingline Loans to the extent amounts received from
the Lenders are not sufficient to repay in full the outstanding Swingline Loans
requested or required to be refunded. If any portion of any such amount paid to
the Swingline Lender shall be recovered by or on behalf of the Borrowers from
the Swingline Lender in bankruptcy or otherwise, the loss of the amount so
recovered shall be ratably shared among all the Lenders in accordance with their
respective Commitment Percentages.
(iii) Each Lender acknowledges and agrees that its obligation to
refund Swingline Loans in accordance with the terms of this Section 2.2 is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including, without limitation, any Default, Event of Default or non-
satisfaction of the conditions set forth in Article V. Further, each Lender
agrees and acknowledges that if prior to the refunding of any outstanding
Swingline
17
Loans pursuant to this Section 2.2, one of the events described in Section
11.1(j) or (k) shall have occurred, each Lender will, on the date the applicable
Revolving Credit Loan would have been made, purchase an undivided participating
interest in the Swingline Loan to be refunded in an amount equal to its
Commitment Percentage of the aggregate amount of such Swingline Loan. Each
Lender will immediately transfer to the Swingline Lender, in immediately
available funds, the amount of its participation and upon receipt thereof the
Swingline Lender will deliver to such Lender a certificate evidencing such
participation dated the date of receipt of such funds and for such amount.
Whenever, at any time after the Swingline Lender has received from any Lender
such Lender's participating interest in a Swingline Loan, the Swingline Lender
receives any payment on account thereof, the Swingline Lender will distribute to
such Lender its participating interest in such amount (appropriately adjusted,
in the case of interest payments, to reflect the period of time during which
such Lender's participating interest was outstanding and funded).
SECTION 2.3 Procedure for Advances of Revolving Credit Loans and Swingline
--------------------------------------------------------------
Loans.
-----
(a) Requests for Borrowing. The Company, on behalf of the Borrowers, shall
----------------------
give the Administrative Agent irrevocable prior written notice in the form
attached hereto as Exhibit B (a "Notice of Borrowing") not later than 11:00 a.m.
---------
(Charlotte time) (i) on the same Business Day as each Base Rate Loan and each
Swingline Loan and (ii) at least three (3) Business Days before each LIBOR Rate
Loan, of its intention to borrow, specifying (A) the date of such borrowing,
which shall be a Business Day, (B) the amount of such borrowing, which shall be
in an amount equal to the amount of the Aggregate Commitment then available to
the Borrowers, or if less, (x) with respect to Base Rate Loans in an aggregate
principal amount of $1,000,000 or a whole multiple of $250,000 in excess thereof
, (y) with respect to LIBOR Rate Loans in an aggregate principal amount of
$3,000,000 or a whole multiple of $1,000,000 in excess thereof and (z) with
respect to Swingline Loans in an aggregate principle amount of $500,000 or a
whole multiple of $100,000 in excess thereof, (C) whether such Loan is to be a
Revolving Credit Loan or a Swingline Loan, (D) in the case of a Revolving Credit
Loan, whether such Loan is to be a LIBOR Rate Loan or a Base Rate Loan and (E)
in the case of a LIBOR Rate Loan, the duration of the Interest Period applicable
thereto. Notices received after 11:00 a.m. (Charlotte time) shall be deemed
received on the next Business Day. The Administrative Agent shall promptly
notify the Lenders of each Notice of Borrowing.
(b) Disbursement of Loans. Not later than 2:00 p.m. (Charlotte time) on
---------------------
the proposed borrowing date, (i) each Lender will make available to the
Administrative Agent, for the account of the Borrowers, at the office of the
Administrative Agent in funds immediately available to the Administrative Agent,
such Lender's Commitment Percentage of the Revolving Credit Loans to be made on
such borrowing date and (ii) the Swingline Lender will make available to the
Administrative Agent, for the account of the Borrowers, at the office of the
Administrative Agent in funds immediately available to the Administrative Agent,
the Swingline Loans to be made on such borrowing date. The Borrowers hereby
irrevocably authorize the Administrative Agent to disburse the proceeds of each
borrowing requested pursuant to this Section 2.3 in immediately available funds
by crediting or wiring such proceeds to the deposit account of the Borrowers
identified in the most recent notice substantially in the form of Exhibit C
---------
hereto (a "Notice of
18
Account Designation") delivered by the Company, on behalf of the Borrowers, to
the Administrative Agent or may be otherwise agreed upon by the Borrowers and
the Administrative Agent from time to time. Subject to Section 4.7 hereof, the
Administrative Agent shall not be obligated to disburse the portion of the
proceeds of any Revolving Credit Loan requested pursuant to this Section 2.3 to
the extent that any Lender has not made available to the Administrative Agent
its Commitment Percentage of such Loan. Revolving Credit Loans to be made for
the purpose of refunding Swingline Loans shall be made by the Lenders as
provided in Section 2.2(b).
SECTION 2.4 Repayment of Loans.
------------------
(a) Repayment on Revolving Credit Termination Date. The Borrowers shall
----------------------------------------------
repay the outstanding principal amount of (i) all Revolving Credit Loans in full
on the Revolving Credit Termination Date and (ii) all Swingline Loans in full in
accordance with Section 2.2(b)(ii), together, in each case, with all accrued but
unpaid interest thereon.
(b) Mandatory Repayment of Excess Loans. If at any time the outstanding
-----------------------------------
principal amount of all Loans exceeds the Aggregate Commitment less the sum of
----
all outstanding Swingline Loans and L/C Obligations, the Borrowers shall repay
immediately upon notice from the Administrative Agent, by payment to the
Administrative Agent for the account of the Lenders, Extensions of Credit in an
amount equal to such excess with each such repayment applied first to the
principal amount of outstanding Swingline Loans and second to the principal
amount of outstanding Revolving Credit Loans and, if necessary, to cash
collateralize any outstanding Letters of Credit in accordance with Section
11.2(b). Each such repayment shall be accompanied by any amount required to be
paid pursuant to Section 4.9 hereof.
(c) Optional Repayments. The Borrowers may at any time and from time
-------------------
to time repay the Loans, in whole or in part, upon at least three (3) Business
Days' irrevocable notice to the Administrative Agent with respect to LIBOR Rate
Loans and one (1) Business Day irrevocable notice with respect to Base Rate
Loans and Swingline Loans, in the form attached hereto as Exhibit D (a "Notice
---------
of Prepayment"), specifying the date and amount of repayment and whether the
repayment is of LIBOR Rate Loans, Base Rate Loans, Swingline Loans or a
combination thereof, and, if of a combination thereof, the amount allocable to
each. Upon receipt of such notice, the Administrative Agent shall promptly
notify each Lender. If any such notice is given, the amount specified in such
notice shall be due and payable on the date set forth in such notice. Partial
repayments shall be in an aggregate amount of $1,000,000 or a whole multiple of
$250,000 in excess thereof with respect to Base Rate Loans, $3,000,000 or a
whole multiple of $1,000,000 in excess thereof with respect to LIBOR Rate Loans
and $500,000 or a whole multiple of $100,000 in excess thereof with respect to
Swingline Loans. Each such repayment shall be accompanied by any amount
required to be paid pursuant to Section 4.9 hereof.
(d) Limitation on Repayment of LIBOR Rate Loans. The Borrowers may not
-------------------------------------------
repay any LIBOR Rate Loan on any day other than on the last day of the Interest
Period applicable
19
thereto unless such repayment is accompanied by any amount required to be paid
pursuant to Section 4.9 hereof.
SECTION 2.5 Notes.
-----
(a) Revolving Credit Notes. Each Lender's Revolving Credit Loans and
----------------------
the obligation of the Borrowers to repay such Revolving Credit Loans shall be
evidenced by a separate Revolving Credit Note executed by the Borrowers payable
to the order of such Lender representing the obligation of the Borrowers to pay
such Lender's Commitment or, if less, the aggregate unpaid principal amount of
all Revolving Credit Loans made and to be made by such Lender to the Borrowers
hereunder, plus interest and all other fees, charges and other amounts due
----
thereon. Each Revolving Credit Note shall be dated the date hereof and shall
bear interest on the unpaid principal amount thereof at the applicable interest
rate per annum specified in Section 4.1.
(b) Swingline Note. The Swingline Loans and the obligations of the
--------------
Borrowers to repay such Swingline Loans shall be evidenced by a Swingline Note
executed by the Borrowers payable to the order of the Swingline Lender
representing the obligation of the Borrowers to pay the Swingline Lender's
Swingline Commitment or, if less, the aggregate unpaid principal amount of all
Swingline Loans made by the Swingline Lender to the Borrowers hereunder, plus
----
interest on such principal amounts and all other fees, charges and other amounts
due thereon. The Swingline Note shall be dated the date hereof and shall bear
interest on the unpaid principal amount thereof at the applicable interest rate
per annum specified in Section 4.1.
SECTION 2.6 Permanent Reduction of the Aggregate Commitment.
-----------------------------------------------
(a) Optional Reduction. The Borrowers shall have the right at any
------------------
time and from time to time, upon at least five (5) Business Days prior written
notice to the Administrative Agent, to permanently reduce, without premium or
penalty, (i) the entire Aggregate Commitment at any time or (ii) portions of the
Aggregate Commitment, from time to time, in an aggregate principal amount not
less than $3,000,000 or any whole multiple of $1,000,000 in excess thereof.
(b) Mandatory Reductions.
--------------------
(i) Asset Sale Proceeds. The Aggregate Commitment shall be
-------------------
permanently reduced by an amount equal to one hundred percent (100%)
of the Net Cash Proceeds in excess of $5,000,000 in the aggregate from
the sale or other disposition of assets during the term of this
Agreement by any Borrower or any of its Subsidiaries pursuant to
Section 10.6(f) hereof; provided that such reduction shall not be
--------
required to the extent that such Net Cash Proceeds are reinvested in
comparable replacement assets within one hundred and eighty (180) days
of any such transaction. Such reduction shall be made within one
hundred and eighty (180) days after the date of consummation of any
such transaction.
(ii) Insurance Proceeds. The Aggregate Commitment shall be
------------------
permanently reduced by an amount equal to one hundred percent (100%)
of the Net Cash Proceeds in
20
excess of $5,000,000 in the aggregate received by any Borrower or any
of its Subsidiaries from any payment during the term of this Agreement
under any hazard insurance policy (as required in accordance with
Section 4(a)(vi) of the Security Agreement); provided that such
--------
reduction shall not be required to the extent that such Net Cash
Proceeds are used to replace or restore the damaged property to which
such Net Cash Proceeds relate within one hundred and eighty (180) days
of the date of the receipt of receipt of such Net Cash Proceeds. Such
reduction shall be made within one hundred and eighty (180) days after
the date of the receipt of such Net Cash Proceeds.
(c) Manner of Payment. Each permanent reduction permitted or required
-----------------
pursuant to this Section 2.6 shall be accompanied by a payment of principal
sufficient to reduce the aggregate outstanding Extensions of Credit of the
Lenders after such reduction to the Aggregate Commitment as so reduced. Any
reduction of the Aggregate Commitment to zero shall be accompanied by payment of
all outstanding Obligations (and furnishing of cash collateral in accordance
with Section 11.2(b) for all L/C Obligations) and termination of the Commitments
and Credit Facility. Such cash collateral shall be applied in accordance with
Section 11.2(b). If the reduction of the Aggregate Commitment requires the
repayment of any LIBOR Rate Loan, such repayment shall be accompanied by any
amount required to be paid pursuant to Section 4.9 hereof.
SECTION 2.7 Termination of Credit Facility. The Credit Facility
------------------------------
shall terminate on the earliest of (a) July 31, 2003, (b) the date of
termination by the Borrowers pursuant to Section 2.6(a) and (c) the date of
termination by the Administrative Agent on behalf of the Lenders pursuant to
Section 11.2(a).
SECTION 2.8 Use of Proceeds. The Borrowers shall use the proceeds of
---------------
the Extensions of Credit (a) to refinance the Refinanced Debt, (b) to finance
Permitted Acquisitions and (c) for working capital and general corporate
requirements of the Borrowers and their Subsidiaries, including the payment of
certain fees and expenses incurred in connection with the transactions
contemplated hereby.
SECTION 2.9 Security. The Obligations of the Borrowers shall be
--------
secured by the Collateral described in the Security Documents.
ARTICLE III
LETTER OF CREDIT FACILITY
SECTION 3.1 L/C Commitment. Subject to the terms and conditions
--------------
hereof, the Issuing Lender, in reliance on the agreements of the other Lenders
set forth in Section 3.4(a), agrees to issue standby letters of credit ("Letters
of Credit") for the account of the Borrowers on any Business Day from the
Closing Date through but not including the L/C Facility Termination Date in such
form as may be approved from time to time by the Issuing Lender; provided, that
--------
the Issuing Lender shall have no obligation to issue any Letter of Credit if,
after giving effect to
21
such issuance, the L/C Obligations would exceed (a) the L/C Commitment or (b)
the Available Commitment of any Lender. Each Letter of Credit shall (i) be
denominated in Dollars in a minimum amount of $50,000, (ii) be a standby letter
of credit issued to support obligations of any Borrower, contingent or
otherwise, incurred in the ordinary course of business, (iii) expire on a date
satisfactory to the Issuing Lender, which date shall be no later than the
earlier of (A) the date that is twelve (12) months after the date of issuance
thereof (provided that any Letter of Credit may be automatically renewable for
additional twelve (12) month periods so long as no such renewal shall cause such
Letter of Credit to terminate on a date that is later than the Revolving Credit
Termination Date) and (B) the Revolving Credit Termination Date and (iv) be
subject to the Uniform Customs and, to the extent not inconsistent therewith,
the laws of the State of North Carolina. The Issuing Lender shall not at any
time be obligated to issue any Letter of Credit hereunder if such issuance would
conflict with, or cause the Issuing Lender or any L/C Participant to exceed any
limits imposed by, any Applicable Law. References herein to "issue" and
derivations thereof with respect to Letters of Credit shall also include
extensions or modifications of any existing Letters of Credit, unless the
context otherwise requires.
SECTION 3.2 Procedure for Issuance of Letters of Credit. The
-------------------------------------------
Borrowers may from time to time request that the Issuing Lender issue a Letter
of Credit by delivering to the Issuing Lender at the Administrative Agent's
Office an Application therefor, completed to the satisfaction of the Issuing
Lender, and such other certificates, documents and other papers and information
as the Issuing Lender may request. Upon receipt of any Application, the Issuing
Lender shall process such Application and the certificates, documents and other
papers and information delivered to it in connection therewith in accordance
with its customary procedures and shall, subject to Section 3.1 and Article V
hereof, promptly issue the Letter of Credit requested thereby (but in no event
shall the Issuing Lender be required to issue any Letter of Credit earlier than
three (3) Business Days after its receipt of the Application therefor and all
such other certificates, documents and other papers and information relating
thereto) by issuing the original of such Letter of Credit to the beneficiary
thereof or as otherwise may be agreed by the Issuing Lender and the applicable
Borrower. The Issuing Lender shall furnish to the Company a copy of such Letter
of Credit and furnish to each Lender a copy of such Letter of Credit and the
amount of each Lender's L/C Participation therein, all promptly following the
issuance of such Letter of Credit.
SECTION 3.3 Commissions and Other Charges.
-----------------------------
(a) The Borrowers shall pay to the Administrative Agent, for the
account of the Issuing Lender and the L/C Participants, a letter of credit
commission with respect to each Letter of Credit in an amount equal to the
Applicable Margin with respect to LIBOR Rate Loans (as set forth in Section 4.1
hereof) on per annum basis on the face amount of such Letter of Credit. Such
commission shall be payable quarterly in arrears on the last Business Day of
each calendar quarter (based on the then current Applicable Margin) and on the
Revolving Credit Termination Date. The Administrative Agent shall, promptly
following its receipt thereof, distribute to the Issuing Lender and the L/C
Participants such commission in accordance with their respective Commitment
Percentages.
22
(b) In addition to the foregoing commission, the Borrowers shall pay
the Issuing Lender for its account an issuance fee of one-eighth percent
(0.125%) per annum on the face amount of each Letter of Credit, payable
quarterly in arrears on the last Business Day of each calendar quarter and on
the Revolving Credit Termination Date.
(c) In addition to the foregoing commissions, the Borrowers shall pay
or reimburse the Issuing Lender for such normal and customary costs and expenses
as are incurred or charges by the Issuing Lender in issuing, effecting payment
under, amending or otherwise administering any Letter of Credit.
SECTION 3.4 L/C Participations.
------------------
(a) The Issuing Lender irrevocably agrees to grant and hereby grants
to each L/C Participant, and, to induce the Issuing Lender to issue Letters of
Credit hereunder, each L/C Participant irrevocably agrees to accept and purchase
and hereby accepts and purchases from the Issuing Lender for such L/C
Participant's own account and risk an undivided interest equal to such L/C
Participant's Commitment Percentage in the Issuing Lender's obligations and
rights under each Letter of Credit issued hereunder and the amount of each draft
paid by the Issuing Lender thereunder. Each L/C Participant unconditionally and
irrevocably agrees with the Issuing Lender (notwithstanding any Default, Event
of Default, non-satisfaction of conditions set forth in Article V or any other
circumstances whatsoever) that, if a draft is paid under any Letter of Credit
for which the Issuing Lender is not reimbursed in full by the Borrowers in
accordance with the terms of this Agreement, such L/C Participant shall pay to
the Issuing Lender upon demand at the Issuing Lender's address for notices
specified herein an amount equal to such L/C Participant's Commitment Percentage
of the amount of such draft, or any part thereof, which is not so reimbursed.
(b) Upon becoming aware of any amount required to be paid by any L/C
Participant to the Issuing Lender pursuant to Section 3.4(a) in respect of any
unreimbursed portion of any payment made by the Issuing Lender under any Letter
of Credit, the Issuing Lender shall notify each L/C Participant of the amount
and due date of such required payment and such L/C Participant shall pay to the
Issuing Lender the amount specified on the applicable due date. If any such
amount is paid to the Issuing Lender after the date such payment is due, such
L/C Participant shall pay to the Issuing Lender on demand, in addition to such
amount, the product of (i) such amount, times (ii) the daily average Federal
-----
Funds Rate as determined by the Administrative Agent during the period from and
including the date such payment is due to the date on which such payment is
immediately available to the Issuing Lender, times (iii) a fraction the
-----
numerator of which is the number of days that elapse during such period and the
denominator of which is 360. A certificate of the Issuing Lender with respect
to any amounts owing under this Section 3.4 shall be conclusive in the absence
of manifest error. With respect to payment to the Issuing Lender of the
unreimbursed amounts described in this Section 3.4(b), if the L/C Participants
receive notice that any such payment is due (A) prior to 1:00 p.m. (Charlotte
time) on any Business Day, such payment shall be due that Business Day, and (B)
after 1:00 p.m. (Charlotte time) on any Business Day, such payment shall be due
on the following Business Day.
23
(c) Whenever, at any time after the Issuing Lender has made payment
under any Letter of Credit and has received from any L/C Participant its
Commitment Percentage of such payment in accordance with this Section 3.4, the
Issuing Lender receives any payment related to such Letter of Credit (whether
directly from any Borrower or otherwise, or any payment of interest on account
thereof, the Issuing Lender will distribute to such L/C Participant its pro rata
--- ----
share thereof; provided, that in the event that any such payment received by the
--------
Issuing Lender shall be required to be returned by the Issuing Lender, such L/C
Participant shall return to the Issuing Lender the portion thereof previously
distributed by the Issuing Lender to it.
SECTION 3.5 Reimbursement Obligation of the Borrowers. The Borrowers
-----------------------------------------
agree to reimburse the Issuing Lender on each date on which the Issuing Lender
notifies the Borrowers of the date and amount of a draft paid under any Letter
of Credit for the amount of (a) such draft so paid and (b) any taxes, fees,
charges or other costs or expenses incurred by the Issuing Lender in connection
with such payment. Each such payment shall be made to the Issuing Lender at its
address for notices specified herein in lawful money of the United States and in
immediately available funds. Interest shall be payable on any and all amounts
remaining unpaid by the Borrowers under this Article III from the date such
amounts become payable (whether at stated maturity, by acceleration or
otherwise) until payment in full at the rate which would be payable on any
outstanding Base Rate Loans which were then overdue. If the Borrowers fail to
timely reimburse the Issuing Lender on the date the Borrowers receive the notice
referred to in this Section 3.5, the Borrowers shall be deemed to have timely
given a Notice of Borrowing hereunder to the Administrative Agent requesting the
Lenders to make a Base Rate Loan on such date in an amount equal to the amount
of such drawing and, regardless of whether or not the conditions precedent
specified in Article V have been satisfied, the Lenders shall make Base Rate
Loans in such amount, the proceeds of which shall be applied to reimburse the
Issuing Lender for the amount of the related drawing and costs and expenses.
SECTION 3.6 Obligations Absolute. The obligations of the Borrowers
--------------------
under this Article III (including, without limitation, the Reimbursement
Obligation) shall be joint and several, and absolute and unconditional under any
and all circumstances and irrespective of any set-off, counterclaim or defense
to payment which the Borrowers may have or have had against the Issuing Lender
or any beneficiary of a Letter of Credit. The Borrowers also agree with the
Issuing Lender that the Issuing Lender shall not be responsible for, and the
Reimbursement Obligation of the Borrowers under Section 3.5 shall not be
affected by, among other things, the validity or genuineness of documents or of
any endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged, or any dispute between or among any Borrower and
any beneficiary of any Letter of Credit or any other party to which such Letter
of Credit may be transferred or any claims whatsoever of any Borrower against
any beneficiary of such Letter of Credit or any such transferee. The Issuing
Lender shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions caused by the Issuing Lender's gross negligence or willful misconduct.
The Borrowers agree that any action taken or omitted by the Issuing Lender under
or in connection with any Letter of Credit or the related drafts or documents,
if done in the absence of gross negligence or willful misconduct and in
accordance with the standards of care specified in the
24
Uniform Customs and, to the extent not inconsistent therewith, the UCC shall be
binding on the Borrowers and shall not result in any liability of the Issuing
Lender to the Borrowers. The responsibility of the Issuing Lender to the
Borrowers in connection with any draft presented for payment under any Letter of
Credit shall, in addition to any payment obligation expressly provided for in
such Letter of Credit, be limited to determining that the documents (including
each draft) delivered under such Letter of Credit in connection with such
presentment are in conformity with such Letter of Credit.
SECTION 3.7 Effect of Application. To the extent that any provision
---------------------
of any Application related to any Letter of Credit is inconsistent with the
provisions of this Article III, the provisions of this Article III shall apply.
ARTICLE IV
GENERAL LOAN PROVISIONS
SECTION 4.1 Interest.
--------
(a) Interest Rate Options.
---------------------
(i) Revolving Credit Loans. Subject to the provisions of this
----------------------
Section 4.1, at the election of the Company, on behalf of the Borrowers, the
aggregate principal balance of the Revolving Credit Notes or any portion thereof
shall bear interest at the Base Rate or the LIBOR Rate plus, in each case, the
Applicable Margin as set forth below; provided that the LIBOR Rate shall not be
--------
available until three (3) Business Days after the Closing Date. The Company, on
behalf of the Borrowers, shall select the rate of interest and Interest Period,
if any, applicable to any Loan at the time a Notice of Borrowing is given
pursuant to Section 2.3 or at the time a Notice of Conversion/Continuation is
given pursuant to Section 4.2. Each Loan or portion thereof bearing interest
based on the Base Rate shall be a "Base Rate Loan", each Loan or portion thereof
bearing interest based on the LIBOR Rate shall be a "LIBOR Rate Loan." Any
Revolving Credit Loan or any portion thereof as to which the Company, on behalf
of the Borrowers, has not duly specified an interest rate as provided herein
shall be deemed a Base Rate Loan.
(ii) Swingline Loans. Subject to the provisions of this Section
---------------
4.1 each Swingline Loan shall bear interest at the Base Rate plus the Applicable
----
Margin as set forth below.
(b) Interest Periods. In connection with each LIBOR Rate Loan, the
----------------
Company, on behalf of the Borrowers, by giving notice at the times described in
Section 4.1(a), shall elect an interest period (each, an "Interest Period") to
be applicable to such Loan, which Interest Period shall be a period of one (1),
two (2), three (3), or six (6) months with respect to each LIBOR Rate Loan;
provided that:
--------
25
(i) the Interest Period shall commence on the date of advance
of or conversion to any LIBOR Rate Loan and, in the case of immediately
successive Interest Periods, each successive Interest Period shall commence on
the date on which the next preceding Interest Period expires;
(ii) if any Interest Period would otherwise expire on a day that
is not a Business Day, such Interest Period shall expire on the next succeeding
Business Day; provided, that if any Interest Period with respect to a LIBOR Rate
--------
Loan would otherwise expire on a day that is not a Business Day but is a day of
the month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
(iii) any Interest Period with respect to a LIBOR Rate Loan that
begins on the last Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of the relevant calendar
month at the end of such Interest Period;
(iv) no Interest Period shall extend beyond the Revolving Credit
Termination Date; and
(v) there shall be no more than six (6) Interest Periods
outstanding at any time.
(c) Applicable Margin. The Applicable Margin provided for in Section
-----------------
4.1(a) with respect to the Loans (the "Applicable Margin") shall (i) on the
Closing Date equal the percentages set forth in the certificate delivered
pursuant to Section 5.2(e)(ii) and (ii) for each fiscal quarter thereafter be
determined by reference to the Leverage Ratio as of the end of the fiscal
quarter immediately preceding the delivery of the applicable Officer's
Compliance Certificate or as of the closing date of any Permitted Acquisition as
follows:
Applicable Margin Per Annum
Leverage Ratio Base Rate + LIBOR Rate +
-------------- ------------------------------
Greater than or equal
to 3.50 to 1.00 0.500% 1.500%
Less than 3.50 to 1.00
and greater than or
equal to 3.00 to 1.00 0.250% 1.250%
Less than 3.00 to 1.00
and greater than or
equal to 2.50 to 1.00 0.000% 1.000%
Less than 2.50 to 1.00
26
and greater than or
equal to 2.00 to 1.00 0.000% 0.875%
Less than 2.00 to 1.00 0.000% 0.750%
Adjustments, if any, in the Applicable Margin shall be made by the
Administrative Agent on the tenth (10th) Business Day (each an "Adjustment
Date") after receipt by the Administrative Agent of quarterly financial
statements for the Company and its Subsidiaries and the accompanying Officer's
Compliance Certificate setting forth the Leverage Ratio of the Company and its
Subsidiaries as of the most recent fiscal quarter end; provided that adjustments
--------
in the Applicable Margin also shall be made by the Administrative Agent on the
closing date of any Permitted Acquisition following receipt by the
Administrative Agent of evidence of pro forma covenant compliance with each
---------
covenant contained in Article IX (as delivered pursuant to Section 10.4(e)
hereof). In the event the Company fails to deliver such financial statements
and certificate or evidence of covenant compliance, as applicable, within the
time required by Sections 7.1, 7.2 and 10.4(e) hereof, the Applicable Margin
shall be the highest Applicable Margin set forth above until the Adjustment Date
following the delivery of such financial statements and certificate or evidence
of covenant compliance, as applicable.
(d) Default Rate. At the election of the Administrative Agent, upon the
------------
occurrence and during the continuance of an Event of Default, (i) the Borrowers
shall no longer have the option to request LIBOR Rate Loans, (ii) all
outstanding LIBOR Rate Loans shall bear interest at a rate per annum two percent
(2%) in excess of the rate then applicable to LIBOR Rate Loans, as applicable,
until the end of the applicable Interest Period and thereafter at a rate equal
to two percent (2%) in excess of the rate then applicable to Base Rate Loans,
and (iii) all outstanding Base Rate Loans and Swingline Loans shall bear
interest at a rate per annum equal to two percent (2%) in excess of the rate
then applicable to Base Rate Loans. Interest shall continue to accrue on the
Notes after the filing by or against any Borrower of any petition seeking any
relief in bankruptcy or under any act or law pertaining to insolvency or debtor
relief, whether state, federal or foreign.
(e) Interest Payment and Computation. Interest on each Base Rate Loan
--------------------------------
shall be payable in arrears on the last Business Day of each calendar quarter
commencing September 30, 1998; and interest on each LIBOR Rate Loan shall be
payable on the last day of each Interest Period applicable thereto, and if such
Interest Period extends over three (3) months, at the end of each three (3)
month interval during such Interest Period. All interest rates, fees and
commissions provided hereunder shall be computed on the basis of a 360-day year
and assessed for the actual number of days elapsed; provided, that interest on
--------
Base Rate Loans shall be computed on the basis of a 365/66-day year and assessed
for the actual number of days elapsed.
(f) Maximum Rate. In no contingency or event whatsoever shall the
------------
aggregate of all amounts deemed interest hereunder or under any of the Notes
charged or collected pursuant to the terms of this Agreement or pursuant to any
of the Notes exceed the highest rate permissible under any Applicable Law which
a court of competent jurisdiction shall, in a final determination, deem
applicable hereto. In the event that such a court determines that the Lenders
have charged
27
or received interest hereunder in excess of the highest applicable rate, the
rate in effect hereunder shall automatically be reduced to the maximum rate
permitted by Applicable Law and the Lenders shall at the Administrative Agent's
option (i) promptly refund to the Borrowers any interest received by Lenders in
excess of the maximum lawful rate or (ii) shall apply such excess to the
principal balance of the Obligations. It is the intent hereof that the Borrowers
not pay or contract to pay, and that neither the Administrative Agent nor any
Lender receive or contract to receive, directly or indirectly in any manner
whatsoever, interest in excess of that which may be paid by the Borrowers under
Applicable Law.
SECTION 4.2 Notice and Manner of Conversion or Continuation of Loans.
--------------------------------------------------------
Provided that no Event of Default has occurred and is then continuing, the
Borrowers shall have the option to (a) convert at any time all or any portion of
its outstanding Base Rate Loans (other than Swingline Loans) in a principal
amount equal to $3,000,000 or any whole multiple of $1,000,000 in excess thereof
into one or more LIBOR Rate Loans and (b) upon the expiration of any Interest
Period, (i) convert all or any part of its outstanding LIBOR Rate Loans in a
principal amount equal to $1,000,000 or a whole multiple of $250,000 in excess
thereof into Base Rate Loans or (ii) continue such LIBOR Rate Loans as LIBOR
Rate Loans. Whenever the Borrowers desire to convert or continue Loans as
provided above, the Company, on behalf of the Borrowers, shall give the
Administrative Agent irrevocable prior written notice in the form attached as
Exhibit E (a "Notice of Conversion/Continuation") not later than 11:00 a.m.
---------
(Charlotte time) three (3) Business Days before the day on which a proposed
conversion or continuation of such Loan is to be effective specifying (A) the
Loans to be converted or continued, and, in the case of any LIBOR Rate Loan to
be converted or continued, the last day of the Interest Period therefor, (B) the
effective date of such conversion or continuation (which shall be a Business
Day), (C) the principal amount of such Loans to be converted or continued, and
(D) the Interest Period to be applicable to such converted or continued LIBOR
Rate Loan. The Administrative Agent shall promptly notify the Lenders of such
Notice of Conversion/Continuation.
SECTION 4.3 Fees.
----
(a) Commitment Fee. Commencing on the Closing Date, the Borrowers shall
--------------
pay to the Administrative Agent, for the account of the Lenders, a non-
refundable commitment fee at a rate per annum equal to the applicable rate (the
"Commitment Fee Rate") set forth below on the average daily unused portion of
the Aggregate Commitment; provided, that the amount of outstanding Swingline
--------
Loans shall not be considered usage of the Aggregate Commitment for the purpose
of calculating such commitment fee. The commitment fee shall be payable in
arrears on the last Business Day of each calendar quarter during the term of
this Agreement commencing September 30, 1998, and on the Revolving Credit
Termination Date. Such commitment fee shall be distributed by the
Administrative Agent to the Lenders pro rata in accordance with the Lenders'
--- ----
respective Commitment Percentages. The Commitment Fee Rate shall (i) on the
Closing Date equal the percentage set forth in the certificate delivered
pursuant to Section 5.2(e)(ii) and (ii) for each fiscal quarter thereafter be
determined by reference to the Leverage Ratio as of the end of the fiscal
quarter immediately preceding the delivery of the applicable Officer's
Compliance Certificate or as of the closing date of any Permitted Acquisition as
follows:
28
Leverage Ratio Commitment Fee Rate
-------------- -------------------
Greater than or equal
to 3.00 to 1.00 0.275%
Less than 3.00 to 1.00 0.250%
Adjustments, if any, in the Commitment Fee Rate shall be made by the
Administrative Agent on the Adjustment Date; provided that adjustments in the
--------
Commitment Fee Percentage also shall be made by the Administrative Agent on the
closing date of any Permitted Acquisition following receipt by the
Administrative Agent of evidence of pro forma covenant compliance with each
covenant contained in Article IX (as delivered pursuant to Section 10.4(e)
hereof). In the event the Company fails to deliver such financial statements
and certificate or evidence of covenant compliance, as applicable, within the
time required by Sections 7.1, 7.2 and 10.4(e) hereof, the Commitment Fee Rate
shall be the highest Commitment Fee Rate set forth above until the Adjustment
Date following the delivery of such financial statements and certificate or
evidence of covenant compliance, as applicable.
(b) Underwriting Fees. The Borrowers shall pay to First Union on the
-----------------
Closing Date the underwriting fee as set forth in the Fee Letter.
(c) Administrative Agent's and Other Fees. The Borrowers agree to pay to
-------------------------------------
the Administrative Agent, for its account, the annual administrative fee as set
forth in the Fee Letter.
SECTION 4.4 Manner of Payment. Each payment by the Borrowers on account of
-----------------
the principal of or interest on the Loans or of any fee, commission or other
amounts (including the Reimbursement Obligation) payable to the Lenders under
this Agreement or any Note shall be made not later than 1:00 p.m. (Charlotte
time) on the date specified for payment under this Agreement to the
Administrative Agent at the Administrative Agent's Office for the account of the
Lenders (other than as set forth below) pro rata in accordance with their
--- ----
respective Commitment Percentages (except as specified below), in Dollars, in
immediately available funds and shall be made without any set-off, counterclaim
or deduction whatsoever. Any payment received after such time but before 2:00
p.m. (Charlotte time) on such day shall be deemed a payment on such date for the
purposes of Section 11.1, but for all other purposes shall be deemed to have
been made on the next succeeding Business Day. Any payment received after 2:00
p.m. (Charlotte time) shall be deemed to have been made on the next succeeding
Business Day for all purposes. Upon receipt by the Administrative Agent of each
such payment, the Administrative Agent shall distribute to each Lender at its
address for notices set forth herein its pro rata share of such payment in
--- ----
accordance with such Lender's Commitment Percentage (except as specified below)
and shall wire advice of the amount of such credit to each Lender. Each payment
to the Administrative Agent of the Issuing Lender's fees or L/C Participants'
commissions shall be made in like manner, but for the account of the Issuing
Lender or the L/C Participants, as the case may be. Each payment to the
Administrative Agent of Administrative Agent's fees or expenses shall be made
for the account of the Administrative Agent and any amount payable to
29
any Lender under Sections 4.8, 4.9, 4.10, 4.11 or 13.2 shall be paid to the
Administrative Agent for the account of the applicable Lender.
SECTION 4.5 Crediting of Payments and Proceeds. In the event that the
----------------------------------
Borrowers shall fail to pay any of the Obligations when due and the Obligations
have been accelerated pursuant to Section 11.2, all payments received by the
Lenders upon the Notes and the other Obligations and all net proceeds from the
enforcement of the Obligations shall be applied first to all expenses then due
and payable by the Borrowers hereunder and under the Loan Documents, then to all
indemnity obligations then due and payable by the Borrowers hereunder and under
the Loan Documents, then to all Administrative Agent's and Issuing Lender's fees
then due and payable, then to all commitment and other fees and commissions then
due and payable, then to accrued and unpaid interest on the Swingline Note to
the Swingline Lender, then to the principal amount outstanding under the
Swingline Note to the Swingline Lender, then to accrued and unpaid interest on
the Revolving Credit Notes and the Reimbursement Obligation (pro rata in
--- ----
accordance with all such amounts due), then to the principal amount of the
Revolving Credit Notes and Reimbursement Obligation, then to the cash collateral
account described in Section 11.2(b) hereof to the extent of any L/C Obligations
then outstanding, and then to the ratable payment of any other outstanding
Obligations, in that order.
SECTION 4.6 Adjustments. If any Lender (a "Benefitted Lender") shall at
-----------
any time receive any payment of all or part of the Obligations owing thereto, or
if any Lender shall at any time receive any collateral in respect to the
Obligations owing thereto (whether voluntarily or involuntarily, by set-off or
otherwise), in a greater proportion than the pro rata distribution to the extent
--- ----
required by Section 4.4, such Benefitted Lender shall purchase for cash from the
other Lenders such portion of each such other Lender's Extensions of Credit or
other Obligations, or shall provide such other Lenders with the benefits of any
such collateral, or the proceeds thereof, as shall be necessary to cause such
Benefitted Lender to share the excess payment or benefits of such collateral or
proceeds ratably with each of the Lenders; provided, that if all or any portion
--------
of such excess payment or benefits is thereafter recovered from such Benefitted
Lender, such purchase shall be rescinded, and the purchase price and benefits
returned to the extent of such recovery, but without interest. The Borrowers
agree that each Lender so purchasing a portion of another Lender's Extensions of
Credit or other Obligations may exercise all rights of payment (including,
without limitation, rights of set-off) with respect to such portion as fully as
if such Lender were the direct holder of such portion.
SECTION 4.7 Nature of Obligations of Lenders Regarding Extensions of
--------------------------------------------------------
Credit; Assumption by the Administrative Agent. The obligations of the Lenders
----------------------------------------------
under this Agreement to make the Loans and issue or participate in Letters of
Credit are several and are not joint or joint and several. Unless the
Administrative Agent shall have received notice from a Lender prior to a
proposed borrowing date that such Lender will not make available to the
Administrative Agent such Lender's ratable portion of the amount to be borrowed
on such date (which notice shall not release such Lender of its obligations
hereunder), the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent on the proposed borrowing date in
accordance with Section 2.3(b) and the Administrative Agent may, in reliance
upon such assumption, make available to the Borrowers on such date a
30
corresponding amount. If such amount is made available to the Administrative
Agent on a date after such borrowing date, such Lender shall pay to the
Administrative Agent on demand an amount, until paid, equal to the product of
(a) the amount of such Lender's Commitment Percentage of such borrowing, times
-----
(b) the daily average Federal Funds Rate during such period as determined by the
Administrative Agent, times (c) a fraction the numerator of which is the number
-----
of days that elapse from and including such borrowing date to the date on which
such Lender's Commitment Percentage of such borrowing shall have become
immediately available to the Administrative Agent and the denominator of which
is 360. A certificate of the Administrative Agent with respect to any amounts
owing under this Section 4.7 shall be conclusive, absent manifest error. If such
Lender's Commitment Percentage of such borrowing is not made available to the
Administrative Agent by such Lender within three (3) Business Days of such
borrowing date, the Administrative Agent shall be entitled to recover such
amount made available by the Administrative Agent with interest thereon at the
rate per annum applicable to Base Rate Loans hereunder, on demand, from the
Borrowers. The failure of any Lender to make its Commitment Percentage of any
Loan available shall not relieve it or any other Lender of its obligation, if
any, hereunder to make its Commitment Percentage of such Loan available on such
borrowing date, but no Lender shall be responsible for the failure of any other
Lender to make its Commitment Percentage of such Loan available on the borrowing
date.
SECTION 4.8 Changed Circumstances.
---------------------
(a) Circumstances Affecting LIBOR Rate Availability. If with respect to
-----------------------------------------------
any Interest Period the Administrative Agent or any Lender (after consultation
with Administrative Agent) shall determine that, by reason of circumstances
affecting the foreign exchange and interbank markets generally, deposits in
eurodollars, in the applicable amounts are not being quoted via Telerate Page
3750 or offered to the Administrative Agent or such Lender for such Interest
Period, then the Administrative Agent shall forthwith give notice thereof to the
Borrowers. Thereafter, until the Administrative Agent notifies the Borrowers
that such circumstances no longer exist, the obligation of the Lenders to make
LIBOR Rate Loans and the right of the Borrowers to convert any Loan to or
continue any Loan as a LIBOR Rate Loan shall be suspended, and the Borrowers
shall repay in full (or cause to be repaid in full) the then outstanding
principal amount of each such LIBOR Rate Loans together with accrued interest
thereon, on the last day of the then current Interest Period applicable to such
LIBOR Rate Loan or convert the then outstanding principal amount of each such
LIBOR Rate Loan to a Base Rate Loan as of the last day of such Interest Period.
(b) Laws Affecting LIBOR Rate Availability. If, after the date hereof, the
--------------------------------------
introduction of, or any change in, any Applicable Law or any change in the
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender (or any of their respective Lending
Offices) with any request or directive (whether or not having the force of law)
of any such Authority, central bank or comparable agency, shall make it unlawful
or impossible for any of the Lenders (or any of their respective Lending
Offices) to honor its obligations hereunder to make or maintain any LIBOR Rate
Loan, such Lender shall promptly give notice thereof to the Administrative Agent
and the Administrative Agent shall promptly
31
give notice to the Borrowers and the other Lenders. Thereafter, until the
Administrative Agent notifies the Borrowers that such circumstances no longer
exist, (i) the obligations of the Lenders to make LIBOR Rate Loans and the right
of the Borrowers to convert any Loan or continue any Loan as a LIBOR Rate Loan
shall be suspended and thereafter the Borrowers may select only Base Rate Loans
hereunder, and (ii) if any of the Lenders may not lawfully continue to maintain
a LIBOR Rate Loan to the end of the then current Interest Period applicable
thereto as a LIBOR Rate Loan, the applicable LIBOR Rate Loan shall immediately
be converted to a Base Rate Loan for the remainder of such Interest Period.
(c) Increased Costs. If, after the date hereof, the introduction of, or
---------------
any change in, any Applicable Law, or in the interpretation or administration
thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any of the
Lenders (or any of their respective Lending Offices) with any request or
directive (whether or not having the force of law) of such Authority, central
bank or comparable agency:
(i) shall subject any of the Lenders (or any of their respective
Lending Offices) to any tax, duty or other charge with respect to any Note,
Letter of Credit or Application or shall change the basis of taxation of
payments to any of the Lenders (or any of their respective Lending Offices) of
the principal of or interest on any Note, Letter of Credit or Application or any
other amounts due under this Agreement in respect thereof (except for changes in
the rate of tax on the overall net income of any of the Lenders or any of their
respective Lending Offices imposed by the jurisdiction in which such Lender is
organized or is or should be qualified to do business or such Lending Office is
located); or
(ii) shall impose, modify or deem applicable any reserve (including,
without limitation, any imposed by the Board of Governors of the Federal Reserve
System), special deposit, insurance or capital or similar requirement against
assets of, deposits with or for the account of, or credit extended by any of the
Lenders (or any of their respective Lending Offices) or shall impose on any of
the Lenders (or any of their respective Lending Offices) or the foreign exchange
and interbank markets any other condition affecting any Note;
and the result of any of the foregoing is to increase the costs to any of the
Lenders of maintaining any LIBOR Rate Loan or issuing or participating in
Letters of Credit or to reduce the yield or amount of any sum received or
receivable by any of the Lenders under this Agreement or under the Notes in
respect of a LIBOR Rate Loan or Letter of Credit or Application, then such
Lender shall promptly notify the Administrative Agent, and the Administrative
Agent shall promptly notify the Borrowers of such fact and demand compensation
therefor and, within fifteen (15) days after such notice by the Administrative
Agent, the Borrowers shall pay to such Lender such additional amount or amounts
as will compensate such Lender or Lenders for such increased cost or reduction.
The Administrative Agent will promptly notify the Borrowers of any event of
which it has knowledge which will entitle such Lender to compensation pursuant
to this Section 4.8(c); provided, that the Administrative Agent shall incur no
--------
liability whatsoever to the Lenders or the Borrowers in the event it fails to do
so. The amount of such compensation shall be determined, in the applicable
Lender's sole discretion, based upon the assumption that such
32
Lender funded its Commitment Percentage of the LIBOR Rate Loans in the London
interbank or domestic certificate of deposit market, as applicable, and using
any reasonable attribution or averaging methods which such Lender deems
appropriate and practical. A certificate of such Lender setting forth the basis
for determining such amount or amounts necessary to compensate such Lender shall
be forwarded to the Borrowers through the Administrative Agent and shall be
conclusively presumed to be correct save for manifest error.
SECTION 4.9 Indemnity. The Borrowers hereby indemnify each of the
---------
Lenders against any loss or expense which may arise or be attributable to each
Lender's obtaining, liquidating or employing deposits or other funds acquired to
effect, fund or maintain any Loan (a) as a consequence of any failure by the
Borrowers to make any payment when due of any amount due hereunder in connection
with a LIBOR Rate Loan, (b) due to any failure of the Borrowers to borrow on a
date specified therefor in a Notice of Borrowing or Notice of
Continuation/Conversion or (c) due to any payment, prepayment or conversion of
any LIBOR Rate Loan on a date other than the last day of the Interest Period
therefor. The amount of such loss or expense shall be determined, in the
applicable Lender's sole discretion, based upon the assumption that such Lender
funded its Commitment Percentage of the LIBOR Rate Loans in the London interbank
or domestic certificate of deposit market, as applicable, and using any
reasonable attribution or averaging methods which such Lender deems appropriate
and practical. A certificate of such Lender setting forth the basis for
determining such amount or amounts necessary to compensate such Lender shall be
forwarded to the Borrowers through the Administrative Agent and shall be
conclusively presumed to be correct save for manifest error.
SECTION 4.10 Capital Requirements. If either (a) the introduction of, or
--------------------
any change in, or in the interpretation of, any Applicable Law or (b) compliance
with any guideline or request from any central bank or comparable agency or
other Governmental Authority (whether or not having the force of law), has or
would have the effect of reducing the rate of return on the capital of, or has
affected or would affect the amount of capital required to be maintained by, any
Lender or any corporation controlling such Lender as a consequence of, or with
reference to the Commitments and other commitments of this type, below the rate
which the Lender or such other corporation could have achieved but for such
introduction, change or compliance, then within five (5) Business Days after
written demand by any such Lender, the Borrowers shall pay to such Lender from
time to time as specified by such Lender additional amounts sufficient to
compensate such Lender or other corporation for such reduction. A certificate as
to such amounts submitted to the Borrowers and the Administrative Agent by such
Lender, shall, in the absence of manifest error, be presumed to be correct and
binding for all purposes.
SECTION 4.11 Taxes.
-----
(a) Payments Free and Clear. Any and all payments by the Borrowers
-----------------------
hereunder or under the Notes or the Letters of Credit shall be made free and
clear of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholding, and all liabilities with respect
thereto excluding, (i) in the case of each Lender and the Administrative Agent,
income and franchise taxes imposed by the jurisdiction under the laws of which
such
33
Lender or the Administrative Agent (as the case may be) is organized or is or
should be qualified to do business or any political subdivision thereof and (ii)
in the case of each Lender, income and franchise taxes imposed by the
jurisdiction of such Lender's Lending Office or any political subdivision
thereof (all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as "Taxes"). If the
Borrowers shall be required by law to deduct any Taxes from or in respect of any
sum payable hereunder or under any Note or Letter of Credit to any Lender or the
Administrative Agent, (A) the sum payable shall be increased as may be necessary
so that after making all required deductions (including deductions applicable to
additional sums payable under this Section 4.11) such Lender or the
Administrative Agent (as the case may be) receives an amount equal to the amount
such party would have received had no such deductions been made, (B) the
Borrowers shall make such deductions, (C) the Borrowers shall pay the full
amount deducted to the relevant taxing authority or other authority in
accordance with applicable law, and (D) the Borrowers shall deliver to the
Administrative Agent evidence of such payment to the relevant taxing authority
or other authority in the manner provided in Section 4.11(d).
(b) Stamp and Other Taxes. In addition, the Borrowers shall pay any
---------------------
present or future stamp, registration, recordation or documentary taxes or any
other similar fees or charges or excise or property taxes, levies of the United
States or any state or political subdivision thereof or any applicable foreign
jurisdiction which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement, the
Loans, the Letters of Credit, the other Loan Documents, or the perfection of any
rights or security interest in respect thereto (hereinafter referred to as
"Other Taxes").
(c) Indemnity. The Borrowers shall indemnify each Lender and the
---------
Administrative Agent for the full amount of Taxes and Other Taxes (including,
without limitation, any Taxes and Other Taxes imposed by any jurisdiction on
amounts payable under this Section 4.11) paid by such Lender or the
Administrative Agent (as the case may be) and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted.
Such indemnification shall be made within thirty (30) days from the date such
Lender or the Administrative Agent (as the case may be) makes written demand
therefor.
(d) Evidence of Payment. Within thirty (30) days after the date of any
-------------------
payment of Taxes or Other Taxes, the Borrowers shall furnish to the
Administrative Agent, at its address referred to in Section 13.1, the original
or a certified copy of a receipt evidencing payment thereof or other evidence of
payment satisfactory to the Administrative Agent.
(e) Delivery of Tax Forms. Each Lender organized under the laws of a
---------------------
jurisdiction other than the United States or any state thereof shall deliver to
the Borrowers, with a copy to the Administrative Agent, on the Closing Date or
concurrently with the delivery of the relevant Assignment and Acceptance, as
applicable, (i) two United States Internal Revenue Service Forms 4224 or Forms
1001, as applicable (or successor forms) properly completed and certifying in
each case that such Lender is entitled to a complete exemption from withholding
or deduction for or on account of any United States federal income taxes, and
(ii) an Internal Revenue Service
34
Form W-8 or W-9 or successor applicable form, as the case may be, to establish
an exemption from United States backup withholding taxes. Each such Lender
further agrees to deliver to the Borrowers, with a copy to the Administrative
Agent, a Form 1001 or 4224 and Form W-8 or W-9, or successor applicable forms or
manner of certification, as the case may be, on or before the date that any such
form expires or becomes obsolete or after the occurrence of any event requiring
a change in the most recent form previously delivered by it to the Borrowers,
certifying in the case of a Form 1001 or 4224 that such Lender is entitled to
receive payments under this Agreement without deduction or withholding of any
United States federal income taxes (unless in any such case an event (including
without limitation any change in treaty, law or regulation) has occurred prior
to the date on which any such delivery would otherwise be required which renders
such forms inapplicable or the exemption to which such forms relate unavailable
and such Lender notifies the Borrowers and the Administrative Agent that it is
not entitled to receive payments without deduction or withholding of United
States federal income taxes) and, in the case of a Form W-8 or W-9, establishing
an exemption from United States backup withholding tax.
(f) Survival. Without prejudice to the survival of any other agreement of
--------
the Borrowers hereunder, the agreements and obligations of the Borrowers
contained in this Section 4.11 shall survive the payment in full of the
Obligations and the termination of the Commitments.
ARTICLE V
CLOSING; CONDITIONS OF CLOSING AND BORROWING
--------------------------------------------
SECTION 5.1 Closing. The closing shall take place at the offices of
-------
Kennedy, Covington, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P. at 10:00 a.m. on July 31, 1998 or
on such other date as the parties hereto shall mutually agree.
SECTION 5.2 Conditions to Closing and Initial Extensions of Credit. The
------------------------------------------------------
obligation of the Lenders to close this Agreement and to make the initial Loan
or issue the initial Letter of Credit is subject to the satisfaction of each of
the following conditions:
(a) Executed Loan Documents. The following Loan Documents in form and
-----------------------
substance reasonably satisfactory to the Administrative Agent and each Lender:
(i) this Agreement;
(ii) the Revolving Credit Notes;
(iii) the Swingline Note;
(iv) the Security Agreement; and
35
(v) the Pledge Agreement;
shall have been duly authorized, executed and delivered to the Administrative
Agent by the parties thereto, shall be in full force and effect and no default
shall exist thereunder, and the Borrowers shall have delivered original
counterparts thereof to the Administrative Agent.
(b) Closing Certificates; etc.
-------------------------
(i) Officer's Certificate of the Borrowers. The Administrative
--------------------------------------
Agent shall have received a certificate from a Responsible Officer of the
Company, on behalf of each Borrower and in form and substance satisfactory to
the Administrative Agent, to the effect that all representations and warranties
of the Borrowers contained in this Agreement and the other Loan Documents are
true, correct and complete; that the Borrowers are not in violation of any of
the covenants contained in this Agreement and the other Loan Documents; that,
after giving effect to the transactions contemplated by this Agreement, no
Default or Event of Default has occurred and is continuing; and that the
Borrowers have satisfied each of the closing conditions.
(ii) Certificate of Secretary of each Borrower. The Administrative
-----------------------------------------
Agent shall have received a certificate of the secretary or assistant secretary
of each Borrower certifying as to the incumbency and genuineness of the
signature of each officer of such Borrower executing Loan Documents to which it
is a party and certifying that attached thereto is a (A) true and complete copy
of the articles of incorporation of such Borrower and all amendments thereto,
certified as of a recent date by the appropriate Governmental Authority in its
jurisdiction of incorporation, (B) a true and complete copy of the bylaws of
such Borrower as in effect on the date of such certifications, (C) that attached
thereto is a true and complete copy of resolutions duly adopted by the Board of
Directors of such Borrower authorizing the borrowings contemplated hereunder and
the execution, delivery and performance of this Agreement and the other Loan
Documents to which it is a party, and (D) a true and complete copy of each
certificate required to be delivered pursuant to Section 5.2(b)(iii).
(iii) Certificates of Good Standing. To the extent requested by the
-----------------------------
Administrative Agent, the Administrative Agent shall have received long-form
certificates as of a recent date of the good standing of each Borrower under the
laws of its jurisdiction of organization and each other jurisdiction where such
Borrower is qualified to do business.
(iv) Opinions of Counsel. The Administrative Agent shall have
-------------------
received favorable opinions of counsel to the Borrowers addressed to the
Administrative Agent and the Lenders with respect to the Borrowers, the Loan
Documents and such other matters as the Lenders shall request.
(v) Tax Forms. The Administrative Agent shall have received
---------
copies of the United States Internal Revenue Service forms required by Section
4.11(e) hereof.
(c) Collateral.
----------
36
(i) Filings and Recordings. All filings and recordations that are
----------------------
necessary to perfect the security interests of the Lenders in the collateral
described in the Security Documents shall have been forwarded for filing in all
appropriate locations and the Administrative Agent shall have received evidence
satisfactory to the Administrative Agent that upon such filings and recordations
such security interests constitute valid and perfected first priority Liens
therein.
(ii) Pledged Collateral. The Administrative Agent shall have
------------------
received (A) original stock certificates or other certificates evidencing the
capital stock or other ownership interests pledged pursuant to the Pledge
Agreement, together with an undated stock or other power for each such
certificate duly executed in blank by the registered owner thereof, and, as
applicable, executed acknowledgements and consents, authorizations statements
and transactions statements and (B) each original promissory note pledged
pursuant to the Security Agreement, together with an undated transfer
instruments executed in blank by the registered owner thereof.
(iii) Lien Search. The Administrative Agent shall have received the
-----------
results of a Lien search (including a search as to judgments, pending litigation
and tax matters) made against the Borrowers and any of their Subsidiaries under
the Uniform Commercial Code (or applicable judicial docket) as in effect in any
state in which any of its assets are located, indicating among other things that
its assets are free and clear of any Lien except for Liens permitted hereunder.
(iv) Hazard and Liability Insurance. The Administrative Agent shall
------------------------------
have received certificates of insurance, evidence of payment of all insurance
premiums for the current policy year of each, and, if requested by the
Administrative Agent, copies (certified by a Responsible Officer of the Company)
of insurance policies in the form required under Section 8.3 and the Security
Documents and otherwise in form and substance reasonably satisfactory to the
Administrative Agent.
(d) Consents; Defaults.
------------------
(i) Governmental and Third Party Approvals. The Borrowers shall
--------------------------------------
have obtained all necessary approvals, authorizations and consents of any Person
and of all Governmental Authorities and courts having jurisdiction with respect
to the transactions contemplated by this Agreement and the other Loan Documents.
(ii) Permits and Licenses. All permits and licenses, including
--------------------
permits and licenses under Applicable Laws, the absence of which would have a
Material Adverse Effect on the current conduct of business of the Borrowers and
their Subsidiaries, shall have been obtained.
(iii) No Injunction, Etc. No action, proceeding, investigation,
------------------
regulation or legislation shall have been instituted, threatened or proposed
before any Governmental Authority to enjoin, restrain, or prohibit, or to obtain
substantial damages in respect of, or which is related to or arises out of this
Agreement or the other Loan Documents or the consummation of the transactions
contemplated hereby or thereby, or which, in the Administrative Agent's sole
discretion, would make it inadvisable to consummate the transactions
contemplated by this Agreement and such other Loan Documents.
37
(iv) No Material Adverse Change. There shall not have occurred any
--------------------------
material adverse change in the condition (financial or otherwise), operations,
properties, business or prospects of the Borrowers and their Subsidiaries or any
event or condition that has had or could reasonably be expected to have a
Material Adverse Effect.
(v) No Event of Default. No Default or Event of Default shall have
-------------------
occurred and be continuing.
(e) Financial Matters.
-----------------
(i) Financial Statements. The Administrative Agent shall have
--------------------
received the audited Consolidated financial statements of the Company and its
Subsidiaries as of March 31, 1998, in form and substance satisfactory to the
Administrative Agent.
(ii) Financial Condition Certificate. The Company, on behalf of the
-------------------------------
Borrowers, shall have delivered to the Administrative Agent a certificate, in
form and substance satisfactory to the Administrative Agent, and certified as
accurate by a Responsible Officer of the Company, that (A) each Borrower and
each of its Subsidiaries are each Solvent, (B) the payables of each Borrower are
current and not past due in the ordinary course of business, (C) attached
thereto is a pro forma balance sheet of the Company and its Subsidiaries setting
--- -----
forth on a pro forma basis the financial condition of the Company and its
--- -----
Subsidiaries on a Consolidated basis as of that date, reflecting a pro forma
--- -----
basis the effect of the transactions contemplated herein, including all fees and
expenses in connection therewith, and evidencing compliance on a pro forma basis
---------
with the covenants contained in Articles IX and X hereof, (D) attached thereto
are the financial projections previously delivered to the Administrative Agent
representing the good faith opinions of the Company and senior management
thereof as to the projected results contained therein, (E) attached thereto is a
calculation of the Applicable Margin and the Commitment Fee Percentage pursuant
to Sections 4.1(c) and 4.3(a) and (F) attached thereto is a calculation setting
forth the Pro Forma Adjusted EBITDA of each Subsidiary of the Company for the
purpose of determining which Subsidiaries of the Company shall be a Borrower on
the Closing Date.
(iii) Payment at Closing; Fee Letters. The Borrowers shall have
-------------------------------
paid the fees set forth or referenced in Section 4.3 and any other accrued and
unpaid fees or commissions due hereunder (including, without limitation, legal
fees and expenses) to the Administrative Agent and Lenders, and to any other
Person such amount as may be due thereto in connection with the transactions
contemplated hereby, including all taxes, fees and other charges in connection
with the execution, delivery, recording, filing and registration of any of the
Loan Documents. The Administrative Agent shall have received duly authorized
and executed copies of the Fee Letter.
(f) Miscellaneous.
-------------
(i) Notice of Borrowing. The Administrative Agent shall have
-------------------
received a Notice of Borrowing from the Company, on behalf of the Borrowers, in
accordance with Section
38
2.3(a), and a Notice of Account Designation from the Company, on behalf of the
Borrowers, specifying the account or accounts to which the proceeds of any Loans
made after the Closing Date are to be disbursed.
(ii) Proceedings and Documents. All opinions, certificates and
-------------------------
other instruments and all proceedings in connection with the transactions
contemplated by this Agreement shall be satisfactory in form and substance to
the Lenders. The Lenders shall have received copies of all other instruments and
other evidence as the Lender may reasonably request, in form and substance
satisfactory to the Lenders, with respect to the transactions contemplated by
this Agreement and the taking of all actions in connection therewith.
(iii) Termination of Refinanced Debt. On or prior to the Closing
------------------------------
Date, the Refinanced Debt shall have been fully and finally paid and terminated
and the Borrowers shall have delivered to the Administrative Agent all UCC
termination statements and other applicable release documents with respect to
all Liens relating to such Refinanced Debt or evidence that such terminations
and releases have been forwarded to the appropriate offices for filing.
(iv) Due Diligence and Other Documents. The Borrowers shall have
---------------------------------
delivered to the Administrative Agent such other documents, certificates and
opinions as the Administrative Agent reasonably requests, including, without
limitation, copies of each document evidencing or governing the Subordinated
Debt to the extent requested thereby, certified by Responsible Officer of the
Company as a true and correct copy thereof.
SECTION 5.3 Conditions to All Loans and Letters of Credit. The obligations
---------------------------------------------
of the Lenders to make any Loan or issue any Letter of Credit is subject to the
satisfaction of the following conditions precedent on the relevant borrowing or
issue date, as applicable:
(a) Continuation of Representations and Warranties. The representations
----------------------------------------------
and warranties contained in Article VI shall be true and correct on and as of
such borrowing or issuance date with the same effect as if made on and as of
such date; except for any representation and warranty made as of an earlier
date, which representation and warranty shall remain true and correct as of such
earlier date.
(b) No Existing Default. No Default or Event of Default shall have
-------------------
occurred and be continuing hereunder (i) on the borrowing date with respect to
such Loan or after giving effect to the Loans to be made on such date or (ii) or
the issue date with respect to such Letter of Credit or after giving affect to
such Letters of Credit on such date.
(c) Officer's Compliance Certificate; Additional Documents. The
------------------------------------------------------
Administrative Agent shall have received the current Officer's Compliance
Certificate and each additional document, instrument, legal opinion or other
item of information reasonably requested by it.
39
SECTION 5.4 Post-Closing Covenants.
----------------------
(a) Within ninety (90) days of the Closing Date, the Borrowers shall
obtain landlord or lessor consents to the Liens in favor of Administrative Agent
and the Lenders granted pursuant to the Security Documents, in form and
substance satisfactory to the Administrative Agent, with respect to any real
property leased by any Borrower on which real property is located Inventory with
a value in excess of $500,000 (the locations of such real property to be set
forth on Schedule 5.4 attached hereto). In addition, the Borrower shall take all
------------
actions reasonably requested by the Administrative Agent or the Required Lenders
to obtain such landlord or lessor consents and any other documents or
certificates reasonably requested by the Administrative Agent in connection
therewith and, if requested thereby, duly recording each document related
thereto in such manner and in such places as are required by the law to perfect
and preserve the Liens in favor of the Administrative Agent and the Lenders
granted pursuant to the Security Documents.
(b) Within sixty (60) days of the Closing Date, the Administrative Agent
shall have entered into an intercreditor agreement in form and substance
reasonably satisfactory thereto with any financial institution which has
extended Vendor-Provided Financing or other trade credit to any Borrower or
Borrowers which financing or credit is secured by a Lien which covers any assets
of the applicable Borrower or Borrowers other than or in addition to the
property and related receivables financed by such financing or credit.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE BORROWERS
SECTION 6.1 Representations and Warranties. To induce the Administrative
------------------------------
Agent and Lenders to enter into this Agreement and to induce the Lenders to make
the Loans or issue or participate in the Letters of Credit, each Borrower hereby
represents and warrants to the Administrative Agent and the Lenders that:
(a) Organization; Power; Qualification. Each Borrower and each Subsidiary
----------------------------------
thereof is duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation or formation, has the power and
authority to own its properties and to carry on its business as now being and
hereafter proposed to be conducted and is duly qualified and authorized to do
business in each jurisdiction in which the character of its properties or the
nature of its business requires such qualification and authorization, except
where the failure to be so qualified and authorized would not be reasonably
expected to have a Material Adverse Effect. The jurisdictions in which each
Borrower and each Subsidiary thereof is organized and qualified to do business
as of the Closing Date are described on Schedule 6.1(a).
---------------
(b) Ownership. Each Subsidiary and each Material Subsidiary of each
---------
Borrower as of the Closing Date is listed on Schedule 6.1(b). As of the
---------------
Closing Date, the capitalization of each Borrower and each Subsidiary thereof
consists of the number of shares, authorized, issued and
40
outstanding, of such classes and series, with or without par value, described on
Schedule 6.1(b). All outstanding shares have been duly authorized and validly
---------------
issued and are fully paid and nonassessable. The shareholders of each Subsidiary
of each Borrower and the number of shares owned by each as of the Closing Date
are described on Schedule 6.1(b). As of the Closing Date, there are no
---------------
outstanding stock purchase warrants, subscriptions, options, securities,
instruments or other rights of any type or nature whatsoever, which are
convertible into, exchangeable for or otherwise provide for or permit the
issuance of capital stock of any Borrower or any Subsidiary thereof, except as
described on Schedule 6.1(b).
---------------
(c) Authorization of Agreement, Loan Documents and Borrowing. Each
--------------------------------------------------------
Borrower and each Subsidiary thereof has the right, power and authority and has
taken all necessary corporate and other action to authorize the execution,
delivery and performance of this Agreement and each of the other Loan Documents
to which it is a party in accordance with their respective terms. This Agreement
and each of the other Loan Documents have been duly executed and delivered by
the duly authorized officers of each Borrower and each Subsidiary thereof party
thereto, and each such document constitutes the legal, valid and binding
obligation of each Borrower and each Subsidiary thereof party thereto,
enforceable in accordance with its terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar state
or federal debtor relief laws from time to time in effect which affect the
enforcement of creditors' rights in general and the availability of equitable
remedies.
(d) Compliance of Agreement, Loan Documents and Borrowing with Laws, Etc.
--------------------------------------------------------------------
The execution, delivery and performance by each Borrower and each Subsidiary
thereof of the Loan Documents to which each such Person is a party, in
accordance with their respective terms, the borrowings hereunder and the
transactions contemplated hereby do not and will not, by the passage of time,
the giving of notice or otherwise, (i) require any Governmental Approval or
violate any Applicable Law relating to any Borrower or any Subsidiary thereof,
(ii) conflict with, result in a breach of or constitute a default under the
articles of incorporation, bylaws or other organizational documents of any
Borrower or any Subsidiary thereof or any indenture, agreement or other
instrument to which such Person is a party or by which any of its properties may
be bound or any Governmental Approval relating to such Person, or (iii) result
in or require the creation or imposition of any Lien upon or with respect to any
property now owned or hereafter acquired by such Person other than Liens arising
under the Loan Documents.
(e) Compliance with Law; Governmental Approvals. Each Borrower and each
-------------------------------------------
Subsidiary thereof (i) has all Governmental Approvals required by any Applicable
Law for it to conduct its business, each of which is in full force and effect,
is final and not subject to review on appeal and is not the subject of any
pending or, to the best of its knowledge, threatened attack by direct or
collateral proceeding, and (ii) is in compliance with each Governmental Approval
applicable to it and in compliance with all other Applicable Laws relating to it
or any of its respective properties, except where the failure to be in
compliance with any such Governmental Approval or Applicable Law would not be
reasonably expected to have a Material Adverse Effect.
41
(f) Tax Returns and Payments. Each Borrower and each Subsidiary thereof
------------------------
has duly filed or caused to be filed all federal, state, local and other tax
returns required by Applicable Law to be filed, and has paid, or made adequate
provision for the payment of, all federal, state, local and other taxes,
assessments and governmental charges or levies upon it and its property, income,
profits and assets which are due and payable. Except as set forth on Schedule
--------
6.1(u), no Governmental Authority has asserted any Lien or other claim against
------
any Borrower or any Subsidiary thereof with respect to unpaid taxes which has
not been discharged or resolved. The charges, accruals and reserves on the
books of each Borrower and each Subsidiary thereof in respect of federal, state,
local and other taxes for all Fiscal Years and portions thereof since the
organization of each such Borrower and each such Subsidiary thereof are in the
judgment of each such Borrower adequate, and each such Borrower does not
anticipate any additional taxes or assessments for any of such years.
(g) Intellectual Property Matters. Each Borrower and each Subsidiary
-----------------------------
thereof owns or possesses rights to use all franchises, licenses, copyrights,
copyright applications, patents, patent rights or licenses, patent applications,
trademarks, trademark rights, trade names, trade name rights, copyrights and
rights with respect to the foregoing which are material and required to conduct
its business. No event has occurred which permits, or after notice or lapse of
time or both would permit, the revocation or termination of any such rights,
and, to each Borrower's knowledge, no Borrower nor any Subsidiary thereof is
liable to any Person for infringement under Applicable Law with respect to any
such rights as a result of its business operations.
(h) Environmental Matters.
---------------------
(i) The properties of each Borrower and each Subsidiary thereof do
not contain, and to their knowledge have not previously contained, any Hazardous
Materials in amounts or concentrations which (A) constitute or constituted a
violation of applicable Environmental Laws or (B) could give rise to liability
under applicable Environmental Laws;
(ii) Such properties and all operations conducted in connection
therewith are in compliance, and have been in compliance, with all applicable
Environmental Laws, and there is no contamination at, under or about such
properties or such operations which could interfere with the continued operation
of such properties or impair the fair saleable value thereof;
(iii) No Borrower nor any Subsidiary thereof has received any notice
of violation, alleged violation, non-compliance, liability or potential
liability regarding environmental matters or compliance with Environmental Laws
with regard to any of their properties or the operations conducted in connection
therewith, nor does any Borrower or any Subsidiary thereof have knowledge or
reason to believe that any such notice will be received or is being threatened;
(iv) Hazardous Materials have not been transported or disposed of
from the properties of any Borrower or any Subsidiary thereof in violation of,
or in a manner or to a location which could give rise to liability under,
Environmental Laws, nor have any Hazardous Materials been generated, treated,
stored or disposed of at, on or under any of such properties in
42
violation of, or in a manner that could give rise to liability under, any
applicable Environmental Laws;
(v) No judicial proceedings or governmental or administrative
action is pending, or, to the knowledge of any Borrower, threatened, under any
Environmental Law to which any Borrower or any Subsidiary thereof is or will be
named as a party with respect to such properties or operations conducted in
connection therewith, nor are there any consent decrees or other decrees,
consent orders, administrative orders or other orders, or other administrative
or judicial requirements outstanding under any Environmental Law with respect to
such properties or such operations; and
(vi) There has been no release, or to the best of the knowledge of
any Borrower, the threat of release, of Hazardous Materials at or from such
properties, in violation of or in amounts or in a manner that could give rise to
liability under Environmental Laws.
(i) ERISA.
-----
(i) As of the Closing Date, no Borrower nor any ERISA Affiliate
maintains or contributes to, or has any obligation under, any Employee Benefit
Plans other than those identified on Schedule 6.1(i);
---------------
(ii) Each Borrower and each ERISA Affiliate is in compliance with
all applicable provisions of ERISA and the regulations and published
interpretations thereunder with respect to all Employee Benefit Plans except for
any required amendments for which the remedial amendment period as defined in
Section 401(b) of the Code has not yet expired. Each Employee Benefit Plan that
is intended to be qualified under Section 401(a) of the Code has been determined
by the Internal Revenue Service to be so qualified, and each trust related to
such plan has been determined to be exempt under Section 501(a) of the Code. No
liability has been incurred by any Borrower or any ERISA Affiliate which remains
unsatisfied for any taxes or penalties with respect to any Employee Benefit Plan
or any Multiemployer Plan;
(iii) No Pension Plan has been terminated, nor has any accumulated
funding deficiency (as defined in Section 412 of the Code) been incurred
(without regard to any waiver granted under Section 412 of the Code), nor has
any funding waiver from the Internal Revenue Service been received or requested
with respect to any Pension Plan, nor has any Borrower or any ERISA Affiliate
failed to make any contributions or to pay any amounts due and owing as required
by Section 412 of the Code, Section 302 of ERISA or the terms of any Pension
Plan prior to the due dates of such contributions under Section 412 of the Code
or Section 302 of ERISA, nor has there been any event requiring any disclosure
under Section 4041(c)(3)(C) or 4063(a) of ERISA with respect to any Pension
Plan;
(iv) No Borrower nor any ERISA Affiliate has: (A) engaged in a
nonexempt prohibited transaction described in Section 406 of the ERISA or
Section 4975 of the Code, (B) incurred any liability to the PBGC which remains
outstanding other than the payment of premiums and there are no premium payments
which are due and unpaid, (C) failed to make a
43
required contribution or payment to a Multiemployer Plan, or (D) failed to make
a required installment or other required payment under Section 412 of the Code;
(v) No Termination Event has occurred or is reasonably expected to
occur; and
(vi) No proceeding, claim, lawsuit and/or investigation is existing
or, to the best knowledge of any Borrower after due inquiry, threatened
concerning or involving any (A) employee welfare benefit plan (as defined in
Section 3(1) of ERISA) currently maintained or contributed to by any Borrower or
any ERISA Affiliate, (B) Pension Plan or (C) Multiemployer Plan.
(j) Margin Stock. No Borrower nor any Subsidiary thereof is engaged
------------
principally or as one of its activities in the business of extending credit for
the purpose of "purchasing" or "carrying" any "margin stock" (as each such term
is defined or used in Regulations G and U of the Board of Governors of the
Federal Reserve System). No part of the proceeds of any of the Loans or Letters
of Credit will be used for purchasing or carrying margin stock or for any
purpose which violates, or which would be inconsistent with, the provisions of
Regulation G, T, U or X of such Board of Governors.
(k) Government Regulation. No Borrower nor any Subsidiary thereof is an
---------------------
"investment company" or a company "controlled" by an "investment company" (as
each such term is defined or used in the Investment Company Act of 1940, as
amended) and no Borrower nor any Subsidiary thereof is, or after giving effect
to any Extension of Credit will be, subject to regulation under the Public
Utility Holding Company Act of 1935 or the Interstate Commerce Act, each as
amended, or any other Applicable Law which limits its ability to incur or
consummate the transactions contemplated hereby.
(l) Material Contracts. Schedule 6.1(l) sets forth a complete and
------------------ ---------------
accurate list of all Material Contracts of each Borrower and each Subsidiary
thereof in effect as of the Closing Date not listed on any other Schedule
hereto; other than as set forth in Schedule 6.1(l), each such Material Contract
---------------
is, and after giving effect to the consummation of the transactions contemplated
by the Loan Documents will be, in full force and effect in accordance with the
terms thereof. Each Borrower and each Subsidiary thereof has delivered to the
Administrative Agent a true and complete copy of each Material Contract which is
required to be listed on Schedule 6.1(l) or any other Schedule hereto and which
---------------
has been requested by the Administrative Agent.
(m) Employee Relations. Each Borrower and each Subsidiary thereof has a
------------------
stable work force in place and is not, as of the Closing Date, party to any
collective bargaining agreement nor has any labor union been recognized as the
representative of its employees except as set forth on Schedule 6.1(m). No
---------------
Borrower knows of any pending, threatened or contemplated strikes, work stoppage
or other collective labor disputes involving its employees or those of its
Subsidiaries.
44
(n) Burdensome Provisions. No Borrower nor any Subsidiary thereof is a
---------------------
party to any indenture, agreement, lease or other instrument, or subject to any
corporate or partnership restriction, Governmental Approval or Applicable Law
which is so unusual or burdensome as in the foreseeable future could be
reasonably expected to have a Material Adverse Effect. No Borrower nor any
Subsidiary thereof presently anticipates that future expenditures needed to meet
the provisions of any statutes, orders, rules or regulations of a Governmental
Authority will be so burdensome as to have a Material Adverse Effect.
(o) Financial Statements. The Consolidated balance sheets of the Company
--------------------
and its Subsidiaries as of March 31, 1998 and the related statements of income
and retained earnings and cash flows for the Fiscal Year then ended, copies of
which have been furnished to the Administrative Agent and each Lender, are
complete and correct and fairly present the assets, liabilities and financial
position of the Company and its Subsidiaries as at such dates, and the results
of the operations and changes of financial position for the periods then ended.
All such financial statements, including the related schedules and notes
thereto, have been prepared in accordance with GAAP. The Company and its
Subsidiaries have no Debt, obligation or other unusual forward or long-term
commitment which is not fairly reflected in the foregoing financial statements
or in the notes thereto.
(p) No Material Adverse Change. Since March 31, 1998, there has been no
--------------------------
material adverse change in the properties, business, operations, prospects, or
condition (financial or otherwise) of the Borrowers and their Subsidiaries and
no event has occurred or condition arisen that could reasonably be expected to
have a Material Adverse Effect.
(q) Solvency. As of the Closing Date and after giving effect to each
--------
Extension of Credit made hereunder, each Borrower and each Subsidiary thereof
will be Solvent.
(r) Titles to Properties. Each Borrower and each Subsidiary thereof has
--------------------
such title to the real property owned by it as is necessary or desirable to the
conduct of its business and valid and legal title to all of its personal
property and assets, including, but not limited to, those reflected on the
balance sheets of the Company and its Subsidiaries delivered pursuant to Section
6.1(o), except those which have been disposed of by any Borrower or any
Subsidiary thereof subsequent to such date which dispositions have been in the
ordinary course of business or as otherwise expressly permitted hereunder. All
of the real property owned or leased by any Borrower is described on Schedule
--------
6.1(r) hereto.
------
(s) Liens. None of the properties and assets of any Borrower or any
-----
Subsidiary thereof is subject to any Lien, except Liens permitted pursuant to
Section 10.3. No financing statement under the Uniform Commercial Code of any
state which names any Borrower or any Subsidiary thereof or any of their
respective trade names or divisions as debtor, and which has not been
terminated, has been filed in any state or other jurisdiction and no Borrower
nor any Subsidiary thereof has signed any such financing statement or any
security agreement authorizing any secured party thereunder to file any such
financing statement, except to perfect those Liens permitted by Section 10.3
hereof.
45
(t) Debt and Guaranty Obligations. Schedule 6.1(t) is a complete and
----------------------------- ---------------
correct listing of all Debt and Guaranty Obligations of each Borrower and each
Subsidiary thereof as of the Closing Date in excess of $1,000,000. Each
Borrower and each Subsidiary thereof has performed and is in compliance with all
of the terms of such Debt and Guaranty Obligations and all instruments and
agreements relating thereto, and no default or event of default, or event or
condition which with notice or lapse of time or both would constitute such a
default or event of default on the part of any Borrower or any Subsidiary
thereof exists with respect to any such Debt or Guaranty Obligation.
(u) Litigation. Except as set forth on Schedule 6.1(u), as of the Closing
---------- ---------------
Date there are no actions, suits or proceedings pending nor, to the knowledge of
any Borrower, threatened against or in any other way relating adversely to or
affecting any Borrower or any Subsidiary thereof or any of their respective
properties in any court or before any arbitrator of any kind or before or by any
Governmental Authority.
(v) Absence of Defaults. No event has occurred or is continuing which
-------------------
constitutes a Default or an Event of Default, or which constitutes, or which
with the passage of time or giving of notice or both would constitute, a default
or event of default by any Borrower or any Subsidiary thereof under any Material
Contract or judgment, decree or order to which any Borrower or any Subsidiary
thereof is a party or by which any Borrower or any Subsidiary thereof or any of
their respective properties may be bound or which would require any Borrower or
its Subsidiaries to make any payment thereunder prior to the scheduled maturity
date therefor.
(w) Senior Debt Status. The Obligations of the Borrowers and their
------------------
Subsidiaries under this Agreement, the Notes and each other Loan Document to
which each such Person is a party do rank and will rank at least senior in
priority of payment to all Subordinated Debt and all senior unsecured Debt of
each such Person and is hereby designated as "Senior Indebtedness" under all
instruments and documents, now or in the future, relating to all Subordinated
Debt and all senior unsecured Debt of each such Person.
(x) No Hostile Acquisitions. No part of the proceeds of the Loans or the
-----------------------
Letters of Credit will be used to finance any Permitted Acquisition unless the
board of directors (or other governing body) or the shareholders of the Person
to be acquired and/or seller, as applicable, shall have previously approved such
transaction.
(y) Accuracy and Completeness of Information. All written information,
----------------------------------------
reports and other papers and data produced by or on behalf of each Borrower and
each Subsidiary thereof and furnished to the Lenders were, at the time the same
were so furnished, complete and correct in all respects to the extent necessary
to give the recipient a true and accurate knowledge of the subject matter. No
document furnished or written statement made to the Administrative Agent or the
Lenders by any Borrower or any Subsidiary thereof in connection with the
negotiation, preparation or execution of this Agreement or any of the Loan
Documents contains or will contain any untrue statement of a fact material to
the creditworthiness of any Borrower or any Subsidiary thereof or omits or will
omit to state a fact necessary in order to make the statements contained therein
not misleading. No Borrower is aware of any facts which it has not disclosed
46
in writing to the Administrative Agent having a Material Adverse Effect, or
insofar as any Borrower can now foresee, could reasonably be expected to have a
Material Adverse Effect.
SECTION 6.2 Survival of Representations and Warranties, Etc. All
-----------------------------------------------
representations and warranties set forth in this Article VI and all
representations and warranties contained in any certificate, or any of the Loan
Documents (including but not limited to any such representation or warranty made
in or in connection with any amendment thereto) shall constitute representations
and warranties made under this Agreement. All representations and warranties
made under this Agreement shall be made or deemed to be made at and as of the
Closing Date, shall survive the Closing Date and shall not be waived by the
execution and delivery of this Agreement, any investigation made by or on behalf
of the Lenders or any borrowing hereunder.
ARTICLE VII
FINANCIAL INFORMATION AND NOTICES
Until all the Obligations have been paid and satisfied in full and the
Commitments terminated, unless consent has been obtained in the manner set forth
in Section 13.11 hereof, the Borrowers will furnish or cause to be furnished to
the Administrative Agent and to the Lenders at their respective addresses as set
forth on Schedule 1.1(a), or such other office as may be designated by the
---------------
Administrative Agent and Lenders from time to time:
SECTION 7.1 Financial Statements and Projections.
------------------------------------
(a) Quarterly Financial Statements. As soon as practicable and in any
------------------------------
event within forty-five (45) days after the end of each fiscal quarter, an
unaudited Consolidated balance sheet of the Company and its Subsidiaries as of
the close of such fiscal quarter and unaudited Consolidated statements of
income, retained earnings and cash flows for the fiscal quarter then ended and
that portion of the Fiscal Year then ended, including the notes thereto and a
report containing management's discussion and analysis of such financial
statements, all in reasonable detail setting forth in comparative form the
corresponding figures for the preceding Fiscal Year and prepared by the Company
in accordance with GAAP and, if applicable, containing disclosure of the effect
on the financial position or results of operations of any change in the
application of accounting principles and practices during the period, and
certified by the chief financial officer of the Company to present fairly in all
material respects the financial condition of the Company and its Subsidiaries as
of their respective dates and the results of operations of the Company and its
Subsidiaries for the respective periods then ended, subject to normal year end
adjustments; provided that the requirements of this subsection (a) may be
--------
satisfied by the delivery of the applicable quarterly report on Form 10-Q
containing the foregoing.
(b) Annual Financial Statements. As soon as practicable and in any event
---------------------------
within ninety (90) days after the end of each Fiscal Year, an audited
Consolidated balance sheet of the Company and its Subsidiaries as of the close
of such Fiscal Year and audited Consolidated statements of income, retained
earnings and cash flows for the Fiscal Year then ended, including
47
the notes thereto and a report containing management's discussion and analysis
of such financial statements, all in reasonable detail setting forth in
comparative form the corresponding figures for the preceding Fiscal Year and
prepared by an independent certified public accounting firm acceptable to the
Administrative Agent in accordance with GAAP and, if applicable, containing
disclosure of the effect on the financial position or results of operation of
any change in the application of accounting principles and practices during the
year, and accompanied by a report thereon by such certified public accountants
that is not qualified with respect to scope limitations imposed by the Company
or any of its Subsidiaries or with respect to accounting principles followed by
the Company or any of its Subsidiaries not in accordance with GAAP; provided
--------
that the requirements of this subsection (b) may be satisfied by the delivery of
the applicable annual report on Form 10-K containing the foregoing.
(c) Annual Business Plan and Financial Projections. As soon as
----------------------------------------------
practicable and in any event within 30 days after the end of each Fiscal Year, a
business plan of the Company and its Subsidiaries for the ensuing four (4)
fiscal quarters, such plan to be prepared in accordance with GAAP and to
include, on a quarterly basis, the following: a quarterly operating and capital
budget, a projected income statement, statement of cash flows and balance sheet
and a report containing management's discussion and analysis of such
projections, accompanied by a certificate from the chief financial officer of
the Company to the effect that, to the best of such officer's knowledge, such
projections are good faith estimates of the financial condition and operations
of the Company and its Subsidiaries for such four (4) fiscal quarter period.
SECTION 7.2 Officer's Compliance Certificate. At each time financial
--------------------------------
statements are delivered pursuant to Sections 7.1 (a) or (b) and at such other
times as the Administrative Agent shall reasonably request, a certificate of the
chief financial officer or the treasurer of the Company, on behalf of the
Borrowers, in the form of Exhibit F attached hereto (an "Officer's Compliance
---------
Certificate").
SECTION 7.3 Accountants' Certificate. At each time financial statements
------------------------
are delivered pursuant to Section 7.1(b), a certificate of the independent
public accountants certifying such financial statements addressed to the
Administrative Agent for the benefit of the Lenders:
(a) stating that in making the examination necessary for the certification
of such financial statements, they obtained no knowledge of any Default or Event
of Default or, if such is not the case, specifying such Default or Event of
Default and its nature and period of existence; and
(b) including the calculations prepared by the Company and reviewed by
such accountants required to establish whether or not the Company and its
Subsidiaries are in compliance with the financial covenants set forth in Article
IX hereof as at the end of each respective period.
48
SECTION 7.4 Other Reports.
-------------
(a) Promptly upon receipt thereof, copies of all reports, if any,
submitted to any Borrower or its Board of Directors by its independent public
accountants in connection with their auditing function, including, without
limitation, any management report and any management responses thereto;
(b) Such other information regarding the operations, business affairs and
financial condition of each Borrower and each Subsidiary thereof as the
Administrative Agent or any Lender may reasonably request.
SECTION 7.5 Notice of Litigation and Other Matters. Prompt (but in no
--------------------------------------
event later than ten (10) days after an officer of any Borrower obtains
knowledge thereof) telephonic and written notice of:
(a) the commencement of all proceedings and investigations by or before
any Governmental Authority and all actions and proceedings in any court or
before any arbitrator against or involving any Borrower or any Subsidiary
thereof or any of their respective properties, assets or businesses;
(b) any notice of any violation received by any Borrower or any Subsidiary
thereof from any Governmental Authority including, without limitation, any
notice of violation of Environmental Laws which in any such case could
reasonably be expected to have a Material Adverse Effect;
(c) any labor controversy that has resulted in, or threatens to result in,
a strike or other work action against any Borrower or any Subsidiary thereof;
(d) any attachment, judgment, lien, levy or order exceeding $1,000,000
that may be assessed against or threatened against any Borrower or any
Subsidiary thereof;
(e) any Default or Event of Default, or any event which constitutes or
which with the passage of time or giving of notice or both would constitute a
default or event of default under any Material Contract to which any Borrower or
any Subsidiary thereof is a party or by which any Borrower or any Subsidiary
thereof or any of their respective properties may be bound;
(f) (i) any unfavorable determination letter from the Internal Revenue
Service regarding the qualification of an Employee Benefit Plan under Section
401(a) of the Code (along with a copy thereof), (ii) all notices received by any
Borrower or any ERISA Affiliate of the PBGC's intent to terminate any Pension
Plan or to have a trustee appointed to administer any Pension Plan, (iii) all
notices received by any Borrower or any ERISA Affiliate from a Multiemployer
Plan sponsor concerning the imposition or amount of withdrawal liability
pursuant to Section 4202 of ERISA and (iv) any Borrower obtaining knowledge or
reason to know that any Borrower or any ERISA Affiliate has filed or intends to
file a notice of intent to
49
terminate any Pension Plan under a distress termination within the meaning of
Section 4041(c) of ERISA; and
(g) any event which makes any of the representations set forth in Section
6.1 inaccurate in any respect.
SECTION 7.6 Accuracy of Information. All written information, reports,
-----------------------
statements and other papers and data furnished by or on behalf of the Borrowers
to the Administrative Agent or any Lender (other than financial forecasts)
whether pursuant to this Article VII or any other provision of this Agreement,
or any of the Security Documents, shall be, at the time the same is so
furnished, complete and correct in all material respects to the extent necessary
to give the Administrative Agent or any Lender complete, true and accurate
knowledge of the subject matter based on the knowledge of the Borrowers thereof.
ARTICLE VIII
AFFIRMATIVE COVENANTS
Until all of the Obligations have been paid and satisfied in full and the
Commitments terminated, unless consent has been obtained in the manner provided
for in Section 13.11, each Borrower will, and will cause each of its
Subsidiaries to:
SECTION 8.1 Preservation of Corporate Existence and Related Matters.
-------------------------------------------------------
Except as permitted by Section 10.5, preserve and maintain its separate
corporate existence and all rights, franchises, licenses and privileges
necessary to the conduct of its business, and qualify and remain qualified as a
foreign corporation and authorized to do business in each jurisdiction in which
the failure to so qualify would have a Material Adverse Effect.
SECTION 8.2 Maintenance of Property. Protect and preserve all properties
-----------------------
useful in and material to its business, including copyrights, patents, trade
names and trademarks; maintain in good working order and condition all
buildings, equipment and other tangible real and personal property; and from
time to time make or cause to be made all renewals, replacements and additions
to such property necessary for the conduct of its business, so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times.
SECTION 8.3 Insurance. Maintain insurance with financially sound and
---------
reputable insurance companies against such risks and in such amounts as are
customarily maintained by similar businesses and as may be required by
Applicable Law and as are required by any Security Documents, and on the Closing
Date and from time to time thereafter deliver to the Administrative Agent upon
its request a detailed list of the insurance then in effect, stating the names
of the insurance companies, the amounts and rates of the insurance, the dates of
the expiration thereof and the properties and risks covered thereby.
50
SECTION 8.4 Accounting Methods and Financial Records. Maintain a system
----------------------------------------
of accounting, and keep such books, records and accounts (which shall be true
and complete in all material respects) as may be required or as may be necessary
to permit the preparation of financial statements in accordance with GAAP and in
compliance with the regulations of any Governmental Authority having
jurisdiction over it or any of its properties.
SECTION 8.5 Payment and Performance of Obligations. Pay and perform all
--------------------------------------
Obligations under this Agreement and the other Loan Documents, and pay or
perform (a) all taxes, assessments and other governmental charges that may be
levied or assessed upon it or any of its property, and (b) all other
indebtedness, obligations and liabilities in accordance with customary trade
practices; provided, that such Borrower or such Subsidiary thereof may contest
--------
any item described in clauses (a) or (b) of this Section 8.5 in good faith so
long as adequate reserves are maintained with respect thereto in accordance with
GAAP.
SECTION 8.6 Compliance With Laws and Approvals. Observe and remain in
----------------------------------
compliance with all Applicable Laws and maintain in full force and effect all
Governmental Approvals, in each case applicable to the conduct of its business.
SECTION 8.7 Environmental Laws. In addition to and without limiting the
------------------
generality of Section 8.6, (a) comply with, and ensure such compliance by all
tenants and subtenants with all applicable Environmental Laws and obtain and
comply with and maintain, and ensure that all tenants and subtenants obtain and
comply with and maintain, any and all licenses, approvals, notifications,
registrations or permits required by applicable Environmental Laws, (b) conduct
and complete all investigations, studies, sampling and testing, and all
remedial, removal and other actions required under Environmental Laws, and
promptly comply with all lawful orders and directives of any Governmental
Authority regarding Environmental Laws, and (c) defend, indemnify and hold
harmless the Administrative Agent and the Lenders, and their respective parents,
Subsidiaries, Affiliates, employees, Administrative Agents, officers and
directors, from and against any claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature known or
unknown, contingent or otherwise, arising out of, or in any way relating to the
violation of, noncompliance with or liability under any Environmental Laws
applicable to the operations of such Borrower or such Subsidiary, or any orders,
requirements or demands of Governmental Authorities related thereto, including,
without limitation, reasonable attorney's and consultant's fees, investigation
and laboratory fees, response costs, court costs and litigation expenses, except
to the extent that any of the foregoing directly result from the gross
negligence or willful misconduct of the party seeking indemnification therefor.
SECTION 8.8 Compliance with ERISA. In addition to and without limiting
---------------------
the generality of Section 8.6, (a) comply with all applicable provisions of
ERISA and the regulations and published interpretations thereunder with respect
to all Employee Benefit Plans, (b) not take any action or fail to take action
the result of which could be a liability to the PBGC or to a Multiemployer Plan,
(c) not participate in any prohibited transaction that could result in any civil
penalty under ERISA or tax under the Code, (d) operate each Employee Benefit
Plan in such a manner that will not incur any tax liability under Section 4980B
of the Code or any liability to
51
any qualified beneficiary as defined in Section 4980B of the Code and (e)
furnish to the Administrative Agent upon the Administrative Agent's request such
additional information about any Employee Benefit Plan as may be reasonably
requested by the Administrative Agent.
SECTION 8.9 Compliance With Agreements. Comply in all respects with each
--------------------------
term, condition and provision of all leases, agreements and other instruments
entered into in the conduct of its business including, without limitation, any
Material Contract; provided, that such Borrower or such Subsidiary may contest
--------
any such lease, agreement or other instrument in good faith through applicable
proceedings so long as adequate reserves are maintained in accordance with GAAP.
SECTION 8.10 Conduct of Business. Engage only in businesses in
-------------------
substantially the same fields as the businesses conducted on the Closing Date
and in lines of business reasonably related thereto.
SECTION 8.11 Visits and Inspections. Permit representatives of the
----------------------
Administrative Agent or any Lender, from time to time upon notice to the Company
and during normal business hours (other than upon or during the continuance of a
Default or an Event of Default), to visit and inspect its properties; inspect,
audit and make extracts from its books, records and files, including, but not
limited to, management letters prepared by independent accountants; and discuss
with its principal officers, and its independent accountants, its business,
assets, liabilities, financial condition, results of operations and business
prospects.
SECTION 8.12 Additional Borrowers and Collateral. Upon the creation or the
-----------------------------------
acquisition of any Material Subsidiary of any Borrower in connection with any
Permitted Acquisition pursuant to Section 10.4(e) and, with respect to any
Subsidiary of any Borrower becoming a Material Subsidiary as evidenced by the
information set forth in the Officer's Compliance Certificate delivered pursuant
to Section 7.2, on or before such delivery date, cause to be delivered to the
Administrative Agent, (i) a Joinder Agreement duly executed by the Company, such
Material Subsidiary and the parent of such Material Subsidiary pursuant to which
(A) such Material Subsidiary shall become a Borrower hereunder, (B) such
Material Subsidiary shall become a Grantor under the Security Agreement and (C)
such Material Subsidiary shall become an Issuer or Partnership/LLC under the
Pledge Agreement, (ii) replacement Notes duly executed by such Material
Subsidiary and each other Borrower then party hereto, (iii) such closing
documents and closing certificates consistent with Section 5.2 hereof as may
reasonably be requested by the Administrative Agent, and (iv) such other
documents reasonably requested by the Administrative Agent in order that such
Material Subsidiary shall become bound by all of the terms, covenants and
agreements contained in the Credit Agreement, the Security Agreement, the Pledge
Agreement and any other Loan Document applicable to such Material Subsidiary. To
the extent that the prior written consent of the Required Lenders is not
required to be delivered pursuant to Section 10.4(e) in connection with the
acquisition of any Material Subsidiary, the Borrowers shall also deliver to the
Administrative Agent, within thirty (30) Business Days of the acquisition of
such Material Subsidiary, favorable legal opinions of counsel to the Company
addressed to the Administrative Agent and the Lenders in form and substance
satisfactory to the Administrative Agent with respect to the Joinder
52
Agreement and the Collateral relating thereto. To the extent that the prior
written consent of the Required Lenders is required to be delivered pursuant to
Section 10.4(e) in connection with the acquisition of any Material Subsidiary,
such legal opinions of counsel to the Company shall be delivered within twenty
(20) Business Days of the acquisition of such Material Subsidiary.
SECTION 8.13 Additional Real Property Collateral.Promptly at the request
-----------------------------------
of the Required Lenders, grant to the Administrative Agent for the ratable
benefit of itself and the Lenders a security interest in any real property owned
or leased by any Borrower or any Subsidiary thereof and/or assign to the
Administrative Agent for the ratable benefit of itself and the Lenders all
rights of any Borrower or any Subsidiary thereof under any real property owned
or leased by any Borrower or any Subsidiary thereof pursuant to documentation
reasonably satisfactory to the Administrative Agent and the Required Lenders,
and take all actions reasonably requested by the Administrative Agent or the
Required Lenders in connection with consummating such assignments and the
granting of such security interests including, without limitation, the obtaining
of landlord or lessor consents, mortgagee title insurance policies, title
surveys and real estate appraisals satisfying the requirements of all Applicable
Laws and duly recording each document related thereto in such manner and in such
places as are required by the law to perfect and preserve the Liens in favor of
the Administrative Agent and the Lenders granted pursuant to such documents.
SECTION 8.14 Year 2000 Compatibility. Take all actions reasonably
-----------------------
necessary to assure that each Borrower's computer based systems are able to
operate and effectively process data which includes dates on and after January
1, 2000. At the request of the Administrative Agent, the Company shall provide
reasonable assurances satisfactory to the Administrative Agent of each
Borrower's Year 2000 compatibility.
SECTION 8.15 Interest Rate Protection. Maintain, commencing within one
------------------------
hundred eighty (180) days of any date on which Extensions of Credit are equal to
or greater than $75,000,000, a Hedging Agreement with a minimum notional amount
at any date of determination as agreed upon by the Borrower and Administrative
Agent and at an interest rate and upon other terms and conditions satisfactory
to the Administrative Agent; provided that the Borrowers shall not be required
to obtain such Hedging Agreement at any time Subordinated Debt permitted under
Section 10.1(c) is outstanding at a fixed interest rate in an aggregate amount
equal to or greater than $75,000,000.
SECTION 8.16 Further Assurances. Make, execute and deliver all such
------------------
additional and further acts, things, deeds and instruments as the Administrative
Agent or any Lender may reasonably require to document and consummate the
transactions contemplated hereby and to vest completely in and insure the
Administrative Agent and the Lenders their respective rights under this
Agreement, the Notes, the Letters of Credit and the other Loan Documents.
53
ARTICLE IX
FINANCIAL COVENANTS
Until all of the Obligations have been paid and satisfied in full and the
Commitments terminated, unless consent has been obtained in the manner set forth
in Section 13.11 hereof, the Company and its Subsidiaries on a Consolidated
basis will not:
SECTION 9.1 Leverage Ratio. As of the end of any fiscal quarter during
--------------
any period set forth below, permit the ratio of (a) Funded Debt as of such date
less cash and Cash Equivalents in excess of $5,000,000 as of such date to (b)
----
Pro Forma Adjusted EBITDA for the period of four (4) consecutive fiscal quarters
ending on such date, to exceed the corresponding ratio set forth below:
Period Ratio
------ -----
Closing Date through and
including December 31, 1999 4.50 to 1.00
January 1, 2000 through and
including December 31, 2000 4.25 to 1.00
January 1, 2001 and thereafter 4.00 to 1.00
SECTION 9.2 Senior Leverage Ratio. As of the end of any fiscal quarter
---------------------
during any period set forth below, permit the ratio of (a) Senior Funded Debt as
of such date less cash and Cash Equivalents in excess of $5,000,000 as of such
----
date to (b) Pro Forma Adjusted EBITDA for the period of four (4) consecutive
fiscal quarters ending on such date, to exceed the corresponding ratio set forth
below:
Period Ratio
------ -----
Closing Date through and
including March 31, 2000 3.75 to 1.00
April 1, 2000 through and
including March 31, 2001 3.50 to 1.00
April 1, 2001 and thereafter 3.25 to 1.00
SECTION 9.3 Fixed Charge Coverage Ratio. As of the end of any fiscal
---------------------------
quarter during any period set forth below, permit the ratio of (a) (i) EBITDA
for the period of four (4) consecutive fiscal quarters ending on such date plus
----
(ii) Rental Expense paid or payable during such period of four (4) consecutive
fiscal quarters to (b) Fixed Charges for such period of four (4) consecutive
fiscal quarters, to be less than the corresponding ratio set forth below:
54
Period Ratio
------ -----
Closing Date through and
including March 31, 1999 1.50 to 1.00
April 1, 1999 through and
Including March 31, 2000 1.60 to 1.00
April 1, 2000 and thereafter 1.75 to 1.00
SECTION 9.4 Minimum Net Worth. As of the end of any fiscal quarter
-----------------
beginning with the fiscal quarter ending June 30, 1998, permit Net Worth to be
less than (i) $60,000,000 plus (ii) fifty percent (50%) of the aggregate of Net
----
Income for each fiscal quarter ending after June 30, 1998 (provided that Net
--------
Income for any such fiscal quarter shall be taken into account for purposes of
this calculation only if positive) plus (iii) one hundred percent (100%) of the
----
aggregate amount of all increases in the stated capital and additional paid-in-
capital accounts of the Company and its Subsidiaries, as determined on a
Consolidated basis in accordance with GAAP, resulting from the issuance of
equity securities (including pursuant to the exercise of options, rights or
warrants or pursuant to the conversion of convertible securities) or other
capital stock after June 30, 1998 plus (iv) one hundred percent (100%) of the
----
Net Cash Proceeds from any equity issuance after June 30, 1998.
SECTION 9.5 Limitation on Rental Pool Capital Expenditures. As of any
----------------------------------------------
Fiscal Year end, permit Rental Pool Capital Expenditures to exceed fifteen
percent (15%) of EBITDA for such Fiscal Year.
ARTICLE X
NEGATIVE COVENANTS
Until all of the Obligations have been paid and satisfied in full and the
Commitments terminated, unless consent has been obtained in the manner set forth
in Section 13.11 hereof, each Borrower will not, and will not permit any of its
Subsidiaries to:
SECTION 10.1 Limitations on Debt. Create, incur, assume or suffer to
-------------------
exist any Debt except:
(a) the Obligations;
(b) Debt incurred in connection with a Hedging Agreement with a
counterparty and upon terms and conditions (including interest rate) reasonably
satisfactory to the Administrative Agent;
55
(c) Subordinated Debt arising under or in connection with public or
privately placed notes, debentures, bonds, or debt securities or related
indentures or other agreements in an aggregate principal amount not to exceed
$150,000,000, so long as (i) no Default or Event of Default exists on the date
any such Subordinated Debt is issued or arises as a result of the incurrence
thereof, (ii) the provisions of the documents evidencing such Subordinated Debt
are not materially more restrictive (as reasonably determined by the
Administrative Agent) than the covenants and other provisions set forth herein
and in the other Loan Documents, (iii) such Subordinated Debt provides for no
scheduled payment of principal prior to July 31, 2004, (iv) such Subordinated
Debt does not require any principal repayment with the proceeds of any event
listed in Section 2.6(b), except to the extent the Lenders waive the application
of any such proceeds to the Obligations, and (v) the documents and other terms
pursuant to which such Subordinated Debt is issued are reasonably satisfactory
to the Administrative Agent and the Required Lenders;
(d) Debt set forth on Schedule 10.1 which is existing on the Closing Date
-------------
and is not otherwise referred to in this Section 10.1, and the renewal and
refinancing (but not the increase at the aggregate principal amount thereof)
thereof;
(e) Debt of the Borrowers and their Subsidiaries incurred in connection
with Capital Leases in an aggregate amount not to exceed $2,000,000 on any date
of determination;
(f) purchase money Debt of the Borrowers and their Subsidiaries with
respect to Capital Assets in an aggregate amount not to exceed $2,000,000 on any
date of determination;
(g) intercompany Debt between any Borrower and any other Borrower;
(h) seller financing constituting Subordinated Debt existing on the Closing
Date or entered into in conjunction with any Permitted Acquisition in an amount
not to exceed $2,500,000 on any date of determination;
(i) Debt consisting of Guaranty Obligations permitted by Section 10.2; and
provided, that none of the Debt permitted to be incurred by this Section 10.1
--------
shall restrict, limit or otherwise encumber (by covenant or otherwise) the
ability of any Subsidiary of any Borrower to make any payment to any Borrower or
any of its Subsidiaries (in the form of dividends, intercompany advances or
otherwise) for the purpose of enabling such Borrower to pay the Obligations.
SECTION 10.2 Limitations on Guaranty Obligations. Create, incur, assume
-----------------------------------
or suffer to exist any Guaranty Obligations except:
(a) Guaranty Obligations in favor of the Administrative Agent for the
benefit of the Administrative Agent and the Lenders;
56
(b) Guaranty Obligations in an amount not to exceed $500,000 to secure
payment or performance of customer service contracts incurred in the ordinary
course of business; and
(c) Guaranty Obligations of the Company with respect to the Debt of any
Subsidiary Borrower permitted by Section 10.1.
SECTION 10.3 Limitations on Liens. Create, incur, assume or suffer to
--------------------
exist, any Lien on or with respect to any of its assets or properties (including
without limitation shares of capital stock or other ownership interests), real
or personal, whether now owned or hereafter acquired, except:
(a) Liens for taxes, assessments and other governmental charges or levies
(excluding any Lien imposed pursuant to any of the provisions of ERISA or
Environmental Laws) not yet due or as to which the period of grace (not to
exceed thirty (30) days), if any, related thereto has not expired or which are
being contested in good faith and by appropriate proceedings if adequate
reserves are maintained to the extent required by GAAP;
(b) the claims of materialmen, mechanics, carriers, warehousemen,
processors or landlords for labor, materials, supplies or rentals incurred in
the ordinary course of business, (i) which are not overdue for a period of more
than thirty (30) days or (ii) which are being contested in good faith and by
appropriate proceedings;
(c) Liens consisting of deposits or pledges made in the ordinary course of
business in connection with, or to secure payment of, obligations under workers'
compensation, unemployment insurance or similar legislation or obligations under
customer service contracts;
(d) Liens constituting encumbrances in the nature of zoning restrictions,
easements and rights or restrictions of record on the use of real property,
which in the aggregate are not substantial in amount and which do not, in any
case, detract from the value of such property or impair the use thereof in the
ordinary conduct of business;
(e) Liens of the Administrative Agent for the benefit of the Administrative
Agent and the Lenders;
(f) Liens not otherwise referred to in this Section 10.3 and in existence
on the Closing Date and described on Schedule 10.3(f);
----------------
(g) Liens securing Debt permitted under Section 10.1(e);
(h) Liens securing obligations of the Company or any applicable Subsidiary
under Vendor-Provided Financing or Trade Payables and described on Schedule
--------
10.3(h); provided that (i) such Liens shall be created substantially
------- --------
simultaneously with the acquisition of the related property, (ii) except with
respect to such Liens designated as "blanket liens" on Schedule 10.3(h), such
----------------
Liens do not at any time encumber any property other than the property and
related receivables of the applicable creditor financed by such financing, (iii)
the principal amount of the
57
obligations secured by any such Lien shall at no time exceed one hundred percent
(100%) of the original purchase price of such property at the time it was
acquired and (iv) the obligations with respect to which such Liens are created
shall not exceed fifty percent (50%) of the fair market value of the Inventory
as of thirty (30) days after the end of any fiscal quarter;
(i) Liens securing Debt permitted under Section 10.1(f); provided that (i)
--------
such Liens shall be created substantially simultaneously with the acquisition of
the related asset, (ii) such Liens do not at any time encumber any property
other than the property financed by such Debt, (iii) the amount of Debt secured
thereby is not increased and (iv) the principal amount of Debt secured by any
such Lien shall at no time exceed one hundred percent (100%) of the original
purchase price of such property at the time it was acquired; and
SECTION 10.4 Limitations on Loans, Advances, Investments and Acquisitions.
------------------------------------------------------------
Purchase, own, invest in or otherwise acquire, directly or indirectly, any
capital stock, interests in any partnership or joint venture (including without
limitation the creation or capitalization of any Subsidiary), evidence of Debt
or other obligation or security, substantially all or a portion of the business
or assets of any other Person or any other investment or interest whatsoever in
any other Person, or make or permit to exist, directly or indirectly, any loans,
advances or extensions of credit to, or any investment in cash or by delivery of
property in, any Person except:
(a) investments in Subsidiaries and the existing loans, advances and
investments not otherwise referred to in this Section 10.4 described on Schedule
--------
10.4;
----
(b) investments in (i) marketable direct obligations issued or
unconditionally guaranteed by the United States of America or any agency thereof
maturing within 120 days from the date of acquisition thereof, (ii) commercial
paper maturing no more than 120 days from the date of creation thereof and
currently having the highest rating obtainable from either Standard & Poor's
Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. or ▇▇▇▇▇'▇
Investors Service, Inc., (iii) certificates of deposit maturing no more than 120
days from the date of creation thereof issued by commercial banks incorporated
under the laws of the United States of America, each having combined capital,
surplus and undivided profits of not less than $500,000,000 and having a rating
of "A" or better by a nationally recognized rating agency; provided, that the
--------
aggregate amount invested in such certificates of deposit shall not at any time
exceed $5,000,000 for any one such certificate of deposit and $10,000,000 for
any one such bank, or (iv) time deposits maturing no more than 30 days from the
date of creation thereof with commercial banks or savings banks or savings and
loan associations each having membership either in the FDIC or the deposits of
which are insured by the FDIC and in amounts not exceeding the maximum amounts
of insurance thereunder (any such investment, a "Cash Equivalent");
(c) loans and advances to employees in the ordinary course of business in
an aggregate amount not to exceed $750,000 at any time;
(d) intercompany loans and advances in connection with intercompany Debt
permitted under Section 10.1(g) hereof; and
58
(e) investments by the Company or any Subsidiary thereof in the form of
acquisitions of all or substantially all of the business or a line of business
(whether by the acquisition of capital stock, assets or any combination thereof)
of any other Person; provided that (i) the Person to be acquired shall engage in
--------
a business or the assets to be acquired shall be used in a business described in
Section 8.10 hereof, (ii) a Borrower or any Subsidiary thereof shall be the
surviving Person and no Change in Control shall have been effected thereby,
(iii) no Default or Event of Default shall have occurred and be continuing both
before and after giving effect to the acquisition, (iv) the Borrowers shall have
obtained the prior written consent of the Required Lenders prior to the
consummation of such acquisition if the cash portion of the Permitted
Acquisition Value of such acquisition exceeds $15,000,000 or the aggregate
Permitted Acquisition Value of such acquisition exceeds $40,000,000 (to the
extent that such consent is required to be provided hereby and to the extent the
Borrowers comply with all applicable provisions of paragraph (C) below, such
written consent, or written notice (or verbal notice subsequently confirmed in
writing) that such consent shall not be given by the Required Lenders, to be
delivered to the Company no later than five (5) Business Days after receipt by
the Lenders of such information), and (v) the Borrowers must comply with the
following requirements:
(A) with respect to any such investment for which the prior written
consent of the Required Lenders is not required and the Person surviving
such acquisition is a not a Material Subsidiary, the Borrowers must comply
with the following additional requirements:
(1) the Borrowers shall have delivered to the Administrative
Agent an Officer's Compliance Certificate dated as of the
closing date of the acquisition demonstrating, in form and
substance reasonably satisfactory thereto, pro forma
--- -----
compliance with each covenant contained in Articles IX and
X;
(2) the Borrowers shall have delivered to the Administrative
Agent on or before the closing date of the acquisition a
description of the acquisition (including, without
limitation, a description of the Person or assets to be
acquired, the purchase price, the manner of acquisition, the
payment structure and any other terms and conditions
reasonably required by the Administrative Agent); and
(3) the Borrowers shall have delivered to the Administrative
Agent such other documents reasonably requested by the
Administrative Agent in connection with such acquisition;
(B) with respect to any such investment for which the prior written
consent of the Required Lenders is not required and the Person surviving
such acquisition is a Material Subsidiary, the Borrowers must comply with
the following additional requirements:
59
(1) the Borrowers shall have delivered to the Administrative
Agent an Officer's Compliance Certificate dated as of the
closing date of the acquisition demonstrating, in form and
substance reasonably satisfactory thereto, pro forma
--- -----
compliance with each covenant contained in Articles IX and
X;
(2) the Borrowers shall have delivered to the Administrative
Agent on or before the closing date of the acquisition a
description of the acquisition (including, without
limitation, a description of the Person or assets to be
acquired, the purchase price, the manner of acquisition, the
payment structure and any other terms and conditions
reasonably required by the Administrative Agent) and draft
copies of the governing documentation (including, without
limitation, the purchase agreement) with respect to the
acquisition;
(3) the Borrowers shall have delivered to the Administrative
Agent all documents required pursuant to Sections 8.12 and
8.13 hereof pursuant to the provisions thereof;
(4) the Borrowers shall have delivered to the Administrative
Agent evidence of the approval of the acquisition by the
board of directors or equivalent governing body (or the
shareholders) of the seller and/or the Person to be
acquired, in form and substance satisfactory to the
Administrative Agent, within thirty (30) days after the
closing of the acquisition;
(5) the Borrowers shall have delivered to the Administrative
Agent copies of the final governing documentation
(including, without limitation, the purchase agreement and
all opinions of counsel to the seller and/or the Person to
be acquired) with respect to the acquisition within thirty
(30) days after the closing of the acquisition;
(6) the Borrowers shall have delivered to the Administrative
Agent within thirty (30) days after the closing of the
acquisition, in form and substance satisfactory thereto, the
historical financial statements of the Person to be
acquired, if applicable, for the most recent two (2) year
period and the most recent interim financial statements of
the Person to be acquired;
(7) the Borrowers shall have delivered to the Administrative
Agent within thirty (30) days after the closing of the
acquisition, in form and substance satisfactory thereto, a
projected income statement, statement of cash flows and
balance sheet (including, without limitation, a summary of
assumptions and pro forma adjustments
--- -----
60
made in connection therewith) of the Person to be acquired,
if applicable, prepared on a quarterly basis for the ensuing
three (3) year period;
(8) the Borrowers shall have delivered to the Administrative
Agent all due diligence reports prepared by or on behalf of
the Company or the applicable Subsidiary thereof within
thirty (30) days after the consummation of the acquisition;
and
(9) the Borrowers shall have provided to the Administrative
Agent such other documents reasonably requested by the
Administrative Agent in connection with such acquisition;
(C) with respect to any such investment for which the prior written
consent of the Required Lenders is required (regardless of whether the
Person surviving such acquisition is or is not a Material Subsidiary), the
Borrowers must comply with the following additional requirements:
(1) the Borrowers shall have delivered to the Lenders, not less
than ten (10) calendar days prior to the proposed closing
date of the acquisition, a description of the acquisition
(including, without limitation, a description of the Person
or assets to be acquired, the purchase price, the manner of
acquisition, the payment structure and any other terms and
conditions reasonably required by the Administrative Agent)
and draft copies of the governing documentation (including,
without limitation, the purchase agreement) with respect to
the acquisition;
(2) the Borrowers shall have delivered to the Lenders, not less
than ten (10) calendar days prior to the proposed closing
date of the acquisition, all due diligence reports prepared
by or on behalf of the Company or the applicable Subsidiary
thereof;
(3) the Borrowers shall have delivered to the Lenders, not less
than ten (10) calendar days prior to the proposed closing
date of the acquisition, the historical financial statements
of the Person to be acquired, if applicable, for the most
recent two (2) year period and the most recent interim
financial statements of the Person to be acquired;
(4) the Borrowers shall have delivered to the Lenders, not less
than ten (10) calendar days prior to the proposed closing
date of the acquisition, a projected income statement,
statement of cash flows and balance sheet (including,
without limitation, a summary of assumptions and pro forma
adjustments made in connection
61
therewith) of the Person to be acquired, if applicable,
prepared on a quarterly basis for the ensuing three (3) year
period;
(5) the Borrowers shall have delivered to the Administrative
Agent, on or before the closing date of the acquisition, an
Officer's Compliance Certificate demonstrating, in form and
substance reasonably satisfactory thereto, pro forma
--- -----
compliance with each covenant contained in Articles IX and
X;
(6) the Borrowers shall have delivered to the Administrative
Agent all documents required pursuant to Sections 8.12 and
8.13 hereof pursuant to the provisions thereof;
(7) the Borrowers shall have delivered to the Administrative
Agent, on or before the closing date of the acquisition,
copies of all opinions of counsel to the seller and/or the
Person to be acquired which are delivered in connection with
the acquisition;
(8) the Borrowers shall have delivered to the Administrative
Agent evidence of the approval of the acquisition by the
board of directors or equivalent governing body (or the
shareholders) of the seller and/or the Person to be
acquired, in form and substance satisfactory to the
Administrative Agent, within twenty (20) days after the
closing of the acquisition;
(9) the Borrowers shall have delivered to the Administrative
Agent copies of the final governing documentation
(including, without limitation, the purchase agreement) with
respect to the acquisition within twenty (20) days after the
closing of the acquisition;
(10) the Borrowers shall have provided to the Administrative
Agent such other documents reasonably requested by the
Administrative Agent in connection with such acquisition.
SECTION 10.5 Limitations on Mergers and Liquidation. Merge,
--------------------------------------
consolidate or enter into any similar combination with any other Person or
liquidate, wind-up or dissolve itself (or suffer any liquidation or dissolution)
except:
(a) any Subsidiary Borrower may merge with another Subsidiary Borrower and
any Subsidiary of any Borrower (that is not then a Borrower) may merge with any
Borrower or any Wholly-Owned Subsidiary of any Borrower (that is not then a
Borrower);
(b) any Wholly-Owned Subsidiary may merge into the Person such Wholly-Owned
Subsidiary was formed to acquire in connection with an acquisition permitted by
Section 10.4(e); and
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(c) any Wholly-Owned Subsidiary of any Borrower may wind-up into any
Borrower or any other Wholly-Owned Subsidiary of any Borrower;
provided that, in each case noted above, (i) if a Borrower or the Company is
--------
party to such transaction, such Borrower or the Company shall be the surviving
entity and (ii) no Default or Event of Default shall have occurred or be
continuing both before and after giving effect to such transaction.
SECTION 10.6 Limitations on Sale of Assets. Convey, sell, lease, assign,
-----------------------------
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, the sale of any receivables and leasehold
interests and any sale-leaseback or similar transaction), whether now owned or
hereafter acquired except:
(a) the sale of Inventory in the ordinary course of business;
(b) the sale of obsolete assets no longer used or usable in the business of
any Borrower or any Subsidiary thereof;
(c) the transfer of assets to any Borrower or any Wholly-Owned Subsidiary
of any Borrower pursuant to Section 10.5(c);
(d) the sale or discount without recourse of accounts receivable arising in
the ordinary course of business in connection with the compromise or collection
thereof; and
(f) any other sale or disposition of assets by any Borrower in the ordinary
course of business; provided that the Net Cash Proceeds from each such sale or
--------
disposition shall be applied to the mandatory repayment of the Extensions of
Credit in the manner set forth in Section 2.6 hereof.
SECTION 10.7 Limitations on Dividends and Distributions. Declare or pay
------------------------------------------
any dividends upon any of its capital stock; purchase, redeem, retire or
otherwise acquire, directly or indirectly, any shares of its capital stock, or
make any distribution of cash, property or assets among the holders of shares of
its capital stock, or make any change in its capital structure that could
reasonably be expected to have a Material Adverse Effect; provided that:
--------
(a) any Borrower or any Subsidiary thereof may pay dividends in shares of
its own capital stock; and
(b) any Borrower or any Subsidiary thereof may pay cash dividends to any
Borrower.
SECTION 10.8 Limitations on Exchange and Issuance of Capital Stock.
-----------------------------------------------------
Issue, sell or otherwise dispose of any class or series of capital stock that,
by its terms or by the terms of any security into which it is convertible or
exchangeable, is, or upon the happening of an event or passage of time would be,
(a) convertible or exchangeable into Debt or (b) required to be
63
redeemed or repurchased, including at the option of the holder, in whole or in
part, or has, or upon the happening of an event or passage of time would have, a
redemption or similar payment due.
SECTION 10.9 Transactions with Affiliates. Directly or indirectly (a)
----------------------------
make any loan or advance to, or purchase or assume any note or other obligation
to or from, any of its officers, directors, shareholders or other Affiliates, or
to or from any member of the immediate family of any of its officers, directors,
shareholders or other Affiliates, or subcontract any operations to any of its
Affiliates or (b) enter into, or be a party to, any other transaction with any
of its Affiliates, except in each case pursuant to the reasonable requirements
of its business and upon fair and reasonable terms that are fully disclosed to
and approved in writing by the Required Lenders prior to the consummation
thereof and are no less favorable to it than it would obtain in a comparable
arm's length transaction with a Person not its Affiliate.
SECTION 10.10 Certain Accounting Changes. Change its Fiscal Year end, or
--------------------------
make any change in its accounting treatment and reporting practices except as
required by GAAP.
SECTION 10.11 Amendments; Payments and Prepayments of Subordinated Debt.
---------------------------------------------------------
Amend or modify (or permit the modification or amendment of) any of the terms or
provisions of any Subordinated Debt (unless such amendment or modification does
not, in the reasonable judgment of the Administrative Agent, adversely affect
the Lenders), or cancel or forgive, make any voluntary or optional payment or
prepayment on, or redeem or acquire for value (including without limitation by
way of depositing with any trustee with respect thereto money or securities
before due for the purpose of paying when due) any Subordinated Debt.
SECTION 10.12 Restrictive Agreements. Enter into any Debt which contains
----------------------
any negative pledge on assets or any covenants more restrictive than the
provisions of Articles VIII, IX and X hereof, or which restricts, limits or
otherwise encumbers its ability to incur Liens on or with respect to any of its
assets or properties other than the assets or properties securing such Debt.
ARTICLE XI
DEFAULT AND REMEDIES
SECTION 11.1 Events of Default. Each of the following shall constitute
-----------------
an Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule or regulation of any
Governmental Authority or otherwise:
(a) Default in Payment of Principal of Loans and Reimbursement Obligations.
----------------------------------------------------------------------
Any Borrower shall default in any payment of principal of any Loan, Note or
Reimbursement Obligation when and as due (whether at maturity, by reason of
acceleration or otherwise).
64
(b) Other Payment Default. Any Borrower shall default in the payment when
---------------------
and as due (whether at maturity, by reason of acceleration or otherwise) of
interest on any Loan, Note or Reimbursement Obligation or the payment of any
other Obligation, and such default shall continue unremedied for three (3)
Business Days.
(c) Misrepresentation. Any representation or warranty made or deemed to be
-----------------
made by any Borrower or any Subsidiary thereof under this Agreement, any Loan
Document or any amendment hereto or thereto, shall at any time prove to have
been incorrect or misleading in any material respect when made or deemed made.
(d) Default in Performance of Certain Covenants. Any Borrower shall
-------------------------------------------
default in the performance or observance of any covenant or agreement contained
in Sections 7.1(a) or (b), 7.2 or 7.5(e) or Articles IX or X of this Agreement.
(e) Default in Performance of Other Covenants and Conditions. Any Borrower
--------------------------------------------------------
or any Subsidiary thereof shall default in the performance or observance of any
term, covenant, condition or agreement contained in this Agreement (other than
as specifically provided for otherwise in this Section 11.1) or any other Loan
Document and such default shall continue for a period of thirty (30) days after
written notice thereof has been given to the Borrowers by the Administrative
Agent.
(f) Hedging Agreement. Any termination payment shall be due by any
-----------------
Borrower under any Hedging Agreement to which any Lender is a party and such
amount is not paid within thirty (30) Business Days of the due date thereof.
(g) Debt Cross-Default. Any Borrower or any Subsidiary thereof shall (i)
------------------
default in the payment of any Debt (other than the Notes or any Reimbursement
Obligation) the aggregate outstanding amount of which Debt is in excess of
$1,000,000 beyond the period of grace if any, provided in the instrument or
agreement under which such Debt was created, or (ii) default in the observance
or performance of any other agreement or condition relating to any Debt (other
than the Notes or any Reimbursement Obligation) the aggregate outstanding amount
of which Debt is in excess of $1,000,000 or contained in any instrument or
agreement evidencing, securing or relating thereto or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Debt (or a
trustee or agent on behalf of such holder or holders) to cause, with the giving
of notice if required, any such Debt to become due prior to its stated maturity
(any applicable grace period having expired).
(h) Other Cross-Defaults. Any Borrower or any Subsidiary thereof shall
--------------------
default in the payment when due, or in the performance or observance, of any
obligation or condition of any Material Contract unless, but only as long as,
the existence of any such default is being contested by such Borrower or such
Subsidiary in good faith by appropriate proceedings and adequate reserves in
respect thereof have been established on the books of such Borrower or such
Subsidiary to the extent required by GAAP.
65
(i) Change in Control. Any person or group of persons (within the meaning
-----------------
of Section 13(d) of the Securities Exchange Act of 1934, as amended) shall
obtain ownership or control in one or more series of transactions of (i) more
than fifty percent (50%) of the common stock or (ii) more than fifty percent
(50%) of the voting power of any Borrower entitled to vote in the election of
members of the board of directors of such Borrower or (iii) such lesser
percentage of such voting power of any Borrower which through its by-laws, a
voting agreement or otherwise entitles any such person or group of person to
elect a majority of the members of the board of directors of such Borrower (any
such event, a "Change in Control").
(j) Voluntary Bankruptcy Proceeding. Any Borrower or any Subsidiary
-------------------------------
thereof shall (i) commence a voluntary case under the federal bankruptcy laws
(as now or hereafter in effect), (ii) file a petition seeking to take advantage
of any other laws, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding up or composition for adjustment of debts, (iii) consent
to or fail to contest in a timely and appropriate manner any petition filed
against it in an involuntary case under such bankruptcy laws or other laws, (iv)
apply for or consent to, or fail to contest in a timely and appropriate manner,
the appointment of, or the taking of possession by, a receiver, custodian,
trustee, or liquidator of itself or of a substantial part of its property,
domestic or foreign, (v) admit in writing its inability to pay its debts as they
become due, (vi) make a general assignment for the benefit of creditors, or
(vii) take any corporate action for the purpose of authorizing any of the
foregoing.
(k) Involuntary Bankruptcy Proceeding. A case or other proceeding shall be
---------------------------------
commenced against any Borrower or any Subsidiary thereof in any court of
competent jurisdiction seeking (i) relief under the federal bankruptcy laws (as
now or hereafter in effect) or under any other laws, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, winding up or adjustment of
debts, or (ii) the appointment of a trustee, receiver, custodian, liquidator or
the like for any Borrower or any Subsidiary thereof or for all or any
substantial part of their respective assets, domestic or foreign, and such case
or proceeding shall continue undismissed or unstayed for a period of sixty (60)
consecutive days, or an order granting the relief requested in such case or
proceeding (including, but not limited to, an order for relief under such
federal bankruptcy laws) shall be entered.
(l) Failure of Agreements. Any material provision of this Agreement or of
---------------------
any other Loan Document shall for any reason cease to be valid and binding on
any Borrower or any Subsidiary thereof party thereto or any such Person shall so
state in writing, or this Agreement or any other Loan Document shall for any
reason cease to create a valid and perfected first priority Lien on, or security
interest in, any of the collateral purported to be covered thereby, in each case
other than in accordance with the express terms hereof or thereof.
(m) Termination Event. The occurrence of any of the following events: (i)
-----------------
any Borrower or any ERISA Affiliate fails to make full payment when due of all
amounts which, under the provisions of any Pension Plan or Section 412 of the
Code, any Borrower or any ERISA Affiliate is required to pay as contributions
thereto, (ii) an accumulated funding deficiency in excess of $1,000,000 occurs
or exists, whether or not waived, with respect to any Pension Plan, (iii) a
Termination Event or (iv) any Borrower or any ERISA Affiliate as
66
employers under one or more Multiemployer Plan makes a complete or partial
withdrawal from any such Multiemployer Plan and the plan sponsor of such
Multiemployer Plans notifies such withdrawing employer that such employer has
incurred a withdrawal liability requiring payments in an amount exceeding
$1,000,000.
(n) Judgment. A judgment or order for the payment of money which causes
--------
the aggregate amount of all such judgments to exceed $1,000,000 in any Fiscal
Year shall be entered against any Borrower or any of Subsidiary thereof by any
court and such judgment or order shall continue undischarged or unstayed for a
period of thirty (30) days.
SECTION 11.2 Remedies. Upon the occurrence of an Event of Default, upon
--------
the request of the Required Lenders (and only upon such request), the
Administrative Agent shall, by notice to the Borrowers:
(a) Acceleration; Termination of Facilities. Declare the principal of and
---------------------------------------
interest on the Loans, the Notes and the Reimbursement Obligations at the time
outstanding, and all other amounts owed to the Lenders and to the Administrative
Agent under this Agreement or any of the other Loan Documents (other than any
Hedging Agreement) (including, without limitation, all L/C Obligations, whether
or not the beneficiaries of the then outstanding Letters of Credit shall have
presented the documents required thereunder) and all other Obligations (other
than obligations owing under any Hedging Agreement), to be forthwith due and
payable, whereupon the same shall immediately become due and payable without
presentment, demand, protest or other notice of any kind, all of which are
expressly waived, anything in this Agreement or the other Loan Documents to the
contrary notwithstanding, and terminate the Credit Facility and any right of the
Borrowers to request borrowings or Letters of Credit thereunder; provided, that
--------
upon the occurrence of an Event of Default specified in Section 11.1(j) or (k),
the Credit Facility shall be automatically terminated and all Obligations (other
than obligations owing under any Hedging Agreement) shall automatically become
due and payable.
(b) Letters of Credit. With respect to all Letters of Credit with respect
-----------------
to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to the preceding paragraph, require the Borrowers at such
time to deposit in a cash collateral account opened by the Administrative Agent
an amount equal to the aggregate then undrawn and unexpired amount of such
Letters of Credit. Amounts held in such cash collateral account shall be
applied by the Administrative Agent to the payment of drafts drawn under such
Letters of Credit, and the unused portion thereof after all such Letters of
Credit shall have expired or been fully drawn upon, if any, shall be applied to
repay the other Obligations. After all such Letters of Credit shall have
expired or been fully drawn upon, the Reimbursement Obligation shall have been
satisfied and all other Obligations shall have been paid in full, the balance,
if any, in such cash collateral account shall be returned to the Borrowers.
(c) Rights of Collection. Exercise on behalf of the Lenders all of its
--------------------
other rights and remedies under this Agreement, the other Loan Documents and
Applicable Law, in order to satisfy all of the Obligations of the Borrowers.
67
SECTION 11.3 Rights and Remedies Cumulative; Non-Waiver; etc. The
-----------------------------------------------
enumeration of the rights and remedies of the Administrative Agent and the
Lenders set forth in this Agreement is not intended to be exhaustive and the
exercise by the Administrative Agent and the Lenders of any right or remedy
shall not preclude the exercise of any other rights or remedies, all of which
shall be cumulative, and shall be in addition to any other right or remedy given
hereunder or under the Loan Documents or that may now or hereafter exist in law
or in equity or by suit or otherwise. No delay or failure to take action on the
part of the Administrative Agent or any Lender in exercising any right, power or
privilege shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or privilege preclude other or further
exercise thereof or the exercise of any other right, power or privilege or shall
be construed to be a waiver of any Event of Default. No course of dealing
between any Borrower, the Administrative Agent and the Lenders or their
respective agents or employees shall be effective to change, modify or discharge
any provision of this Agreement or any of the other Loan Documents or to
constitute a waiver of any Event of Default.
ARTICLE XII
THE ADMINISTRATIVE AGENT
SECTION 12.1 Appointment. Each of the Lenders hereby irrevocably designates
-----------
and appoints First Union as Administrative Agent of such Lender under this
Agreement and the other Loan Documents for the term hereof and each such Lender
irrevocably authorizes First Union as Administrative Agent for such Lender, to
take such action on its behalf under the provisions of this Agreement and the
other Loan Documents and to exercise such powers and perform such duties as are
expressly delegated to the Administrative Agent by the terms of this Agreement
and such other Loan Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in
this Agreement or such other Loan Documents, the Administrative Agent shall not
have any duties or responsibilities, except those expressly set forth herein and
therein, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or the other Loan Documents or otherwise exist
against the Administrative Agent.
SECTION 12.2 Delegation of Duties. The Administrative Agent may execute any
--------------------
of its respective duties under this Agreement and the other Loan Documents by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or attorneys-
in-fact selected by the Administrative Agent with reasonable care.
SECTION 12.3 Exculpatory Provisions. Neither the Administrative Agent nor
----------------------
any of its officers, directors, employees, agents, attorneys-in-fact,
Subsidiaries or Affiliates shall be (a) liable for any action lawfully taken or
omitted to be taken by it or such Person under or in connection with this
Agreement or the other Loan Documents (except for actions occasioned solely by
its or such Person's own gross negligence or willful misconduct), or (b)
responsible in
68
any manner to any of the Lenders for any recitals, statements, representations
or warranties made by any Borrower or any Subsidiary thereof or any officer
thereof contained in this Agreement or the other Loan Documents or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Administrative Agent under or in connection with, this
Agreement or the other Loan Documents or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or the other Loan
Documents or for any failure of any Borrower or any Subsidiary thereof to
perform its obligations hereunder or thereunder. The Administrative Agent shall
not be under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement, or to inspect the properties, books or records of any
Borrower or any Subsidiary thereof.
SECTION 12.4 Reliance by the Administrative Agent. The Administrative Agent
------------------------------------
shall be entitled to rely, and shall be fully protected in relying, upon any
note, writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, statement, order or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons and upon advice
and statements of legal counsel (including, without limitation, counsel to the
Borrowers), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat the payee of
any Note as the owner thereof for all purposes unless such Note shall have been
transferred in accordance with Section 13.10 hereof. The Administrative Agent
shall be fully justified in failing or refusing to take any action under this
Agreement and the other Loan Documents unless it shall first receive such advice
or concurrence of the Required Lenders (or, when expressly required hereby or by
the relevant other Loan Document, all the Lenders) as it deems appropriate or it
shall first be indemnified to its satisfaction by the Lenders against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action except for its own gross negligence or
willful misconduct. The Administrative Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
Notes in accordance with a request of the Required Lenders (or, when expressly
required hereby, all the Lenders), and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Notes.
SECTION 12.5 Notice of Default. The Administrative Agent shall not be
-----------------
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless it has received notice from a Lender or the Borrowers
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". In the event that the
Administrative Agent receives such a notice, it shall promptly give notice
thereof to the Lenders. The Administrative Agent shall take such action with
respect to such Default or Event of Default as shall be reasonably directed by
the Required Lenders; provided that unless and until the Administrative Agent
shall have received such directions, the Administrative Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Lenders, except to the extent that other provisions of
this Agreement
69
expressly require that any such action be taken or not be taken only with the
consent and authorization or the request of the Lenders or the Required Lenders,
as applicable.
SECTION 12.6 Non-Reliance on the Administrative Agent and Other Lenders.
----------------------------------------------------------
Each Lender expressly acknowledges that neither the Administrative Agent nor any
of its respective officers, directors, employees, agents, attorneys-in-fact,
Subsidiaries or Affiliates has made any representations or warranties to it and
that no act by the Administrative Agent hereinafter taken, including any review
of the affairs of the Borrowers or any of their Subsidiaries, shall be deemed to
constitute any representation or warranty by the Administrative Agent to any
Lender. Each Lender represents to the Administrative Agent that it has,
independently and without reliance upon the Administrative Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Borrowers and their Subsidiaries and made its own decision to make its Loans and
issue or participate in Letter of Credit hereunder and enter into this
Agreement. Each Lender also represents that it will, independently and without
reliance upon the Administrative Agent or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking or not taking
action under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Borrowers and their Subsidiaries. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder or by the other Loan Documents, the
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
property, financial and other condition or creditworthiness of the Borrowers or
any of their Subsidiaries which may come into the possession of the
Administrative Agent or any of its respective officers, directors, employees,
agents, attorneys-in-fact, Subsidiaries or Affiliates.
SECTION 12.7 Indemnification. The Lenders agree to indemnify the
---------------
Administrative Agent in its capacity as such and (to the extent not reimbursed
by the Borrowers and without limiting the obligation of the Borrowers to do so),
ratably according to the respective amounts of their Commitment Percentages,
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind whatsoever which may at any time (including, without limitation, at any
time following the payment of the Notes or any Reimbursement Obligation) be
imposed on, incurred by or asserted against the Administrative Agent in any way
relating to or arising out of this Agreement or the other Loan Documents, or any
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the
Administrative Agent under or in connection with any of the foregoing; provided
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from the Administrative
Agent's bad faith, gross negligence or willful misconduct. The agreements in
this Section 12.7 shall survive the payment of the Notes, any Reimbursement
Obligation and all other amounts payable hereunder and the termination of this
Agreement.
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SECTION 12.8 The Administrative Agent in Its Individual Capacity. The
---------------------------------------------------
Administrative Agent and its respective Subsidiaries and Affiliates may make
loans to, accept deposits from and generally engage in any kind of business with
any Borrower as though the Administrative Agent were not an Administrative Agent
hereunder. With respect to any Loans made or renewed by it and any Note issued
to it and with respect to any Letter of Credit issued by it or participated in
by it, the Administrative Agent shall have the same rights and powers under this
Agreement and the other Loan Documents as any Lender and may exercise the same
as though it were not an Administrative Agent, and the terms "Lender" and
"Lenders" shall include the Administrative Agent in its individual capacity.
SECTION 12.9 Resignation of the Administrative Agent; Successor
--------------------------------------------------
Administrative Agent. Subject to the appointment and acceptance of a successor
--------------------
as provided below, the Administrative Agent may resign at any time by giving
notice thereof to the Lenders and the Borrowers. Upon any such resignation, the
Required Lenders shall have the right, with the consent of the Company, which
consent shall not be unreasonably withheld, to appoint a successor
Administrative Agent, which successor shall have minimum capital and surplus of
at least $500,000,000. If no successor Administrative Agent shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within thirty (30) days after the Administrative Agent's giving of notice of
resignation, then the Administrative Agent may, on behalf of the Lenders,
appoint a successor Administrative Agent, which successor shall have minimum
capital and surplus of at least $500,000,000. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations hereunder. After any retiring Administrative
Agent's resignation hereunder as Administrative Agent, the provisions of this
Section 12.9 shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as Administrative Agent.
SECTION 12.10 Documentation Agent. The Documentation Agent, in its capacity
-------------------
as Documentation Agent, shall have no duties or responsibilities under this
Agreement or any other Loan Document.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 Notices.
-------
(a) Method of Communication. Except as otherwise provided in this
-----------------------
Agreement, all notices and communications hereunder shall be in writing, or by
telephone subsequently confirmed in writing. Any notice shall be effective if
delivered by hand delivery or sent via telecopy, recognized overnight courier
service or certified mail, return receipt requested, and shall be presumed to be
received by a party hereto (i) on the date of delivery if delivered by hand,
71
courier service or sent by telecopy and (ii) on the third Business Day following
the date sent by certified mail, return receipt requested. A telephonic notice
to the Administrative Agent as understood by the Administrative Agent will be
deemed to be the controlling and proper notice in the event of a discrepancy
with or failure to receive a confirming written notice.
(b) Addresses for Notices. Notices to any party shall be sent to it at the
---------------------
following addresses, or any other address as to which all the other parties are
notified in writing.
If to the Borrowers: Global Imaging Systems, Inc.
▇▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇▇
Chief Financial Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to First Union as First Union National Bank
Administrative ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇
Agent: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Syndication Agency Services
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to: First Union National Bank at the Address set forth
on Schedule 1.1(a) hereto
---------------
If to any Lender: To the Address set forth on Schedule 1.1(a) hereto
---------------
(c) Administrative Agent's Office. The Administrative Agent hereby
-----------------------------
designates its office located at the address set forth above, or any subsequent
office which shall have been specified for such purpose by written notice to the
Borrowers and the Lenders, as the Administrative Agent's Office referred to
herein, to which payments due are to be made and at which Loans will be
disbursed and Letters of Credit issued.
SECTION 13.2 Expenses; Indemnity. The Borrowers will (a) pay all reasonable
-------------------
out-of-pocket expenses of the Administrative Agent in connection with (i) the
preparation, execution and delivery of this Agreement and each other Loan
Document, whenever the same shall be executed and delivered, including without
limitation all out-of-pocket syndication and due diligence expenses and
reasonable fees and disbursements of counsel for the Administrative Agent and
(ii) the preparation, execution and delivery of any waiver, amendment or consent
by the Administrative Agent or the Lenders relating to this Agreement or any
other Loan Document, including without limitation reasonable fees and
disbursements of counsel for the Administrative Agent, (b) pay all reasonable
out-of-pocket expenses of the Administrative Agent and each Lender actually
incurred in connection with the administration and enforcement of any rights and
72
remedies of the Administrative Agent and Lenders under the Credit Facility,
including consulting with appraisers, accountants, engineers, attorneys and
other Persons concerning the nature, scope or value of any right or remedy of
the Administrative Agent or any Lender hereunder or under any other Loan
Document or any factual matters in connection therewith, which expenses shall
include without limitation the reasonable fees and disbursements of such
Persons, and (c) defend, indemnify and hold harmless the Administrative Agent
and the Lenders, and their respective parents, Subsidiaries, Affiliates,
employees, agents, officers and directors, from and against any losses,
penalties, fines, liabilities, settlements, damages, costs and expenses,
suffered by any such Person in connection with any claim, investigation,
litigation or other proceeding (whether or not the Administrative Agent or any
Lender is a party thereto) and the prosecution and defense thereof, arising out
of or in any way connected with the Agreement, any other Loan Document or the
Loans, including without limitation reasonable attorney's and consultant's fees,
except to the extent that any of the foregoing directly result from the gross
negligence or willful misconduct of the party seeking indemnification therefor.
SECTION 13.3 Set-off. In addition to any rights now or hereafter granted
-------
under Applicable Law and not by way of limitation of any such rights, upon and
after the occurrence of any Event of Default and during the continuance thereof,
the Lenders and any assignee or participant of a Lender in accordance with
Section 13.10 are hereby authorized by the Borrowers at any time or from time to
time, without notice to the Borrowers or to any other Person, any such notice
being hereby expressly waived, to set off and to appropriate and to apply any
and all deposits (general or special, time or demand, including, but not limited
to, indebtedness evidenced by certificates of deposit, whether matured or
unmatured) and any other indebtedness at any time held or owing by the Lenders,
or any such assignee or participant to or for the credit or the account of the
Borrowers against and on account of the Obligations irrespective of whether or
not (a) the Lenders shall have made any demand under this Agreement or any of
the other Loan Documents or (b) the Administrative Agent shall have declared any
or all of the Obligations to be due and payable as permitted by Section 11.2 and
although such Obligations shall be contingent or unmatured.
SECTION 13.4 Governing Law. This Agreement, the Notes and the other Loan
-------------
Documents, unless otherwise expressly set forth therein, shall be governed by,
construed and enforced in accordance with the laws of the State of North
Carolina, without reference to the conflicts or choice of law principles
thereof.
SECTION 13.5 Consent to Jurisdiction. The Borrowers hereby irrevocably
-----------------------
consent to the personal jurisdiction of the state and federal courts located in
Mecklenburg County, North Carolina, in any action, claim or other proceeding
arising out of any dispute in connection with this Agreement, the Notes and the
other Loan Documents, any rights or obligations hereunder or thereunder, or the
performance of such rights and obligations. The Borrowers hereby irrevocably
consents to the service of a summons and complaint and other process in any
action, claim or proceeding brought by the Administrative Agent or any Lender in
connection with this Agreement, the Notes or the other Loan Documents, any
rights or obligations hereunder or thereunder, or the performance of such rights
and obligations, on behalf of itself or its property, in the manner specified in
Section 13.1. Nothing in this Section 13.5
73
shall affect the right of the Administrative Agent or any Lender to serve legal
process in any other manner permitted by Applicable Law or affect the right of
the Administrative Agent or any Lender to bring any action or proceeding against
any Borrower or its properties in the courts of any other jurisdictions.
SECTION 13.6 Binding Arbitration; Waiver of Jury Trial.
(a) Binding Arbitration. Upon demand of any party hereto, whether made
-------------------
before or after institution of any judicial proceeding, any claim or controversy
arising out of, or relating to this Agreement or any other Loan Document (a
"Dispute"), between or among the parties hereto or any other Loan Document,
shall be resolved by binding arbitration conducted under and governed by the
Commercial Financial Disputes Arbitration Rules (the "Arbitration Rules") of the
American Arbitration Association (the "AAA") and the Federal Arbitration Act.
Disputes may include, without limitation, tort claims, counterclaims, disputes
as to whether a matter is subject to arbitration, claims brought as class
actions, or claims arising from documents executed in the future. A judgment
upon the award may be entered in any court having jurisdiction. Notwithstanding
the foregoing, this arbitration provision does not apply to disputes under or
related to any Hedging Agreement that is a Loan Document.
(b) Special Rules. All arbitration hearings shall be conducted in
-------------
Charlotte, North Carolina. A hearing shall begin within 90 days of demand for
arbitration and all hearings shall be concluded within 120 days of demand for
arbitration. These time limitations may not be extended unless a party shows
cause for extension and then for no more than a total of 60 days. The expedited
procedures set forth in Rule 51 et seq. of the Arbitration Rules shall be
applicable to claims of less than $1,000,000. Arbitrators shall be licensed
attorneys selected from the Commercial Financial Dispute Arbitration Panel of
the AAA. The parties hereto do not waive applicable Federal or state
substantive law except as provided herein.
(c) Preservation and Limitation of Remedies.
---------------------------------------
(i) Notwithstanding the preceding binding arbitration provisions, the
parties hereto and to the other Loan Documents agree to preserve, without
diminution, certain remedies that any such Person may exercise before or after
an arbitration proceeding is brought. Each such Person shall have the right to
proceed in any court of proper jurisdiction or by self-help to exercise or
prosecute the following remedies, as applicable: (i) all rights to foreclose
against any real or personal property or other security by exercising a power of
sale or under applicable law by judicial foreclosure including a proceeding to
confirm the sale; (ii) all rights of self-help including peaceful occupation of
real property and collection of rents, set-off, and peaceful possession of
personal property; (iii) obtaining provisional or ancillary remedies including
injunctive relief, sequestration, garnishment, attachment, appointment of
receiver and filing an involuntary bankruptcy proceeding; and (iv) when
applicable, a judgment by confession of judgment. Any claim or controversy with
regard to any party's entitlement to such remedies is a Dispute.
74
(ii) Each party hereto and to the other Loan Documents agrees that it
shall not have a remedy of punitive or exemplary damages against any other party
hereto or any other Loan Document in any Dispute and hereby waives any right or
claim to punitive or exemplary damages such party has now or which may arise in
the future in connection with any Dispute, whether the Dispute is resolved by
arbitration or judicially.
(d) JURY TRIAL. THE PARTIES HERETO AND TO THE OTHER LOAN DOCUMENTS
----------
ACKNOWLEDGE THAT BY AGREEING TO BINDING ARBITRATION THEY HAVE IRREVOCABLY WAIVED
ANY RIGHT THEY MAY HAVE TO A JURY TRIAL WITH REGARD TO A DISPUTE.
SECTION 13.7 Reversal of Payments. To the extent any Borrower makes a
--------------------
payment or payments to the Administrative Agent for the ratable benefit of the
Lenders or the Administrative Agent receives any payment or proceeds of the
collateral which payments or proceeds or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or proceeds repaid, the Obligations or part thereof
intended to be satisfied shall be revived and continued in full force and effect
as if such payment or proceeds had not been received by the Administrative
Agent.
SECTION 13.8 Injunctive Relief; Punitive Damages
-----------------------------------
(a) The Borrowers recognizes that, in the event the Borrowers fails to
perform, observe or discharge any of its obligations or liabilities under this
Agreement, any remedy of law may prove to be inadequate relief to the Lenders.
Therefore, the Borrowers agree that the Lenders, at the Lenders' option, shall
be entitled to temporary and permanent injunctive relief in any such case
without the necessity of proving actual damages.
(b) The Administrative Agent, Lenders and the Borrowers (on behalf of
themselves and their Subsidiaries) hereby agree that no such Person shall have a
remedy of punitive or exemplary damages against any other party to a Loan
Document and each such Person hereby waives any right or claim to punitive or
exemplary damages that they may now have or may arise in the future in
connection with any Dispute, whether such Dispute is resolved through
arbitration or judicially.
(c) The parties agree that they shall not have a remedy of punitive or
exemplary damages against any other party in any Dispute and hereby waive any
right or claim to punitive or exemplary damages they have now or which may arise
in the future in connection with any Dispute whether the Dispute is resolved by
arbitration or judicially.
SECTION 13.9 Accounting Matters. All financial and accounting calculations,
------------------
measurements and computations made for any purpose relating to this Agreement,
including, without limitation, all computations utilized by the Borrowers or any
of their Subsidiary to determine compliance with any covenant contained herein,
shall, except as otherwise expressly
75
contemplated hereby or unless there is an express written direction by the
Administrative Agent to the contrary agreed to by the Borrowers, be performed in
accordance with GAAP as in effect on the Closing Date. In the event that changes
in GAAP shall be mandated by the Financial Accounting Standards Board, or any
similar accounting body of comparable standing, or shall be recommended by the
certified public accountants of the Borrowers, to the extent that such changes
would modify such accounting terms or the interpretation or computation thereof,
such changes shall be followed in defining such accounting terms only from and
after the date the Borrowers and the Lenders shall have amended this Agreement
to the extent necessary to reflect any such changes in the financial covenants
and other terms and conditions of this Agreement.
SECTION 13.10 Successors and Assigns; Participations
--------------------------------------
(a) Benefit of Agreement. This Agreement shall be binding upon and inure
--------------------
to the benefit of the Borrowers, the Administrative Agent and the Lenders, all
future holders of the Notes, and their respective successors and assigns, except
that no Borrower shall assign or transfer any of its rights or obligations under
this Agreement without the prior written consent of each Lender.
(b) Assignment by Lenders. Each Lender may, with the consent of the
---------------------
Administrative Agent and, so long as no Default or Event of Default has occurred
and is continuing, the Borrowers, which consents shall not be unreasonably
withheld, assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Agreement (including, without
limitation, all or a portion of the Extensions of Credit at the time owing to it
and the Notes held by it); provided that:
--------
(i) each such assignment shall be of a constant, and not a varying,
percentage of all the assigning Lender's rights and obligations under this
Agreement;
(ii) if less than all of the assigning Lender's Commitment is to be
assigned, the Commitment so assigned shall not be less than $5,000,000;
(iii) the parties to each such assignment shall execute and deliver to
the Administrative Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance in the form of Exhibit G attached hereto (an
---------
"Assignment and Acceptance"), together with any Note or Notes subject to such
assignment;
(iv) such assignment shall not, without the consent of the Borrowers,
require the Borrowers to file a registration statement with the Securities and
Exchange Commission or apply to or qualify the Loans or the Notes under the blue
sky laws of any state; and
(v) the assigning Lender shall pay to the Administrative Agent an
assignment fee of $3,000 upon the execution by such Lender of the Assignment and
Acceptance; provided that no such fee shall be payable upon any assignment by a
--------
Lender to an Affiliate thereof.
76
Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, which effective date
shall be at least five (5) Business Days after the execution thereof, (A) the
assignee thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereby
and (B) the Lender thereunder shall, to the extent provided in such assignment,
be released from its obligations under this Agreement.
(c) Rights and Duties Upon Assignment. By executing and delivering an
---------------------------------
Assignment and Acceptance, the assigning Lender thereunder and the assignee
thereunder confirm to and agree with each other and the other parties hereto as
set forth in such Assignment and Acceptance.
(d) Register. The Administrative Agent shall maintain a copy of each
--------
Assignment and Acceptance delivered to it and a register for the recordation of
the names and addresses of the Lenders and the amount of the Extensions of
Credit with respect to each Lender from time to time (the "Register"). The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrowers, the Administrative Agent and the Lenders may treat each
person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
the Borrowers or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(e) Issuance of New Notes. Upon its receipt of an Assignment and
---------------------
Acceptance executed by an assigning Lender and an Eligible Assignee together
with any Note or Notes subject to such assignment and the written consent to
such assignment, the Administrative Agent shall, if such Assignment and
Acceptance has been completed and is substantially in the form of Exhibit G:
---------
(i) accept such Assignment and Acceptance;
(ii) record the information contained therein in the Register;
(iii) give prompt notice thereof to the Lenders and the
Borrowers; and
(iv) promptly deliver a copy of such Assignment and Acceptance
to the Borrowers.
Within five (5) Business Days after receipt of notice, the Borrowers shall
execute and deliver to the Administrative Agent, in exchange for the surrendered
Note or Notes, a new Note or Notes to the order of such Eligible Assignee in
amounts equal to the Commitment assumed by it pursuant to such Assignment and
Acceptance and a new Note or Notes to the order of the assigning Lender in an
amount equal to the Commitment retained by it hereunder. Such new Note or Notes
shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Note or Notes, shall be dated the effective date of
such Assignment and Acceptance
77
and shall otherwise be in substantially the form of the assigned Notes delivered
to the assigning Lender. Each surrendered Note or Notes shall be canceled and
returned to the Borrowers.
(f) Participations. Each Lender may sell participations to one or more
--------------
banks or other entities in all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its
Extensions of Credit and the Notes held by it); provided that:
--------
(i) each such participation shall be in an amount not less
than $5,000,000;
(ii) such Lender's obligations under this Agreement (including,
without limitation, its Commitment) shall remain unchanged;
(iii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations;
(iv) such Lender shall remain the holder of the Notes held by
it for all purposes of this Agreement;
(v) the Borrowers, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement;
(vi) such Lender shall not permit such participant the right to
approve any waivers, amendments or other modifications to this Agreement or any
other Loan Document other than waivers, amendments or modifications which would
reduce the principal of or the interest rate on any Loan or Reimbursement
Obligation, extend the term or increase the amount of the Commitment, reduce the
amount of any fees to which such participant is entitled, extend any scheduled
payment date for principal of any Loan or, except as expressly contemplated
hereby or thereby, release substantially all of the Collateral; and
(vii) any such disposition shall not, without the consent of the
Borrowers, require the Borrowers to file a registration statement with the
Securities and Exchange Commission to apply to qualify the Loans or the Notes
under the blue sky law of any state.
(g) Disclosure of Information; Confidentiality. The Administrative Agent
------------------------------------------
and the Lenders shall hold all non-public information with respect to the
Borrowers obtained pursuant to the Loan Documents in accordance with their
customary procedures for handling confidential information; provided, that the
--------
Administrative Agent may disclose information relating to this Agreement to Gold
----
Sheets and other similar bank trade publications, such information to consist of
------
deal terms and other information customarily found in such publications. Any
Lender may, in connection with any assignment, proposed assignment,
participation or proposed participation pursuant to this Section 13.10, disclose
to the assignee, participant, proposed assignee or proposed participant, any
information relating to the Borrowers furnished to such Lender by or
78
on behalf of the Borrowers; provided, that prior to any such disclosure, each
such assignee, proposed assignee, participant or proposed participant shall
agree with the Borrowers or such Lender to preserve the confidentiality of any
confidential information relating to the Borrowers received from such Lender.
(h) Certain Pledges or Assignments. Nothing herein shall prohibit any
------------------------------
Lender from pledging or assigning any Note to any Federal Reserve Bank in
accordance with Applicable Law.
SECTION 13.11 Amendments, Waivers and Consents. Except as set forth below,
--------------------------------
any term, covenant, agreement or condition of this Agreement or any of the other
Loan Documents may be amended or waived by the Lenders, and any consent given by
the Lenders, if, but only if, such amendment, waiver or consent is in writing
signed by the Required Lenders (or by the Administrative Agent with the consent
of the Required Lenders) and delivered to the Administrative Agent and, in the
case of an amendment, signed by each Borrower; provided, that no amendment,
waiver or consent shall (a) increase the amount or extend the time of the
obligation of the Lenders to make Loans or issue or participate in Letters of
Credit (including, without limitation, pursuant to Section 2.7), (b) extend the
originally scheduled time or times of payment of the principal of any Loan or
Reimbursement Obligation or the time or times of payment of interest on any Loan
or Reimbursement Obligation, (c) reduce the rate of interest or fees payable on
any Loan or Reimbursement Obligation, (d) reduce the principal amount of any
Loan or Reimbursement Obligation, (e) permit any subordination of the principal
or interest on any Loan or Reimbursement Obligation, (f) release any material
portion of the Collateral or release any Security Document (other than as
permitted or contemplated in this Agreement or the applicable Security
Document), (g) amend or waive the mandatory prepayment provisions of this
Agreement, (h) amend or waive the provisions of Sections 8.12 or 8.13 hereof or
(i) amend the provisions of this Section 13.11 or the definition of Required
Lenders, without the prior written consent of each Lender. In addition, no
amendment, waiver or consent to the provisions of (a) Article XII shall be made
without the written consent of the Administrative Agent and (b) Article III
without the written consent of the Issuing Lender.
SECTION 13.12 Performance of Duties. The obligations of the Borrowers under
---------------------
this Agreement and each of the Loan Documents shall be performed by the
Borrowers at their sole cost and expense.
SECTION 13.13 All Powers Coupled with Interest. All powers of attorney and
--------------------------------
other authorizations granted to the Lenders, the Administrative Agent and any
Persons designated by the Administrative Agent or any Lender pursuant to any
provisions of this Agreement or any of the other Loan Documents shall be deemed
coupled with an interest and shall be irrevocable so long as any of the
Obligations remain unpaid or unsatisfied or the Credit Facility has not been
terminated.
SECTION 13.14 Survival of Indemnities. Notwithstanding any termination of
-----------------------
this Agreement, the indemnities to which the Administrative Agent and the
Lenders are entitled under the provisions of this Article XIII and any other
provision of this Agreement and the Loan
79
Documents shall continue in full force and effect and shall protect the
Administrative Agent and the Lenders against events arising after such
termination as well as before.
SECTION 13.15 Titles and Captions. Titles and captions of Articles,
-------------------
Sections and subsections in this Agreement are for convenience only, and neither
limit nor amplify the provisions of this Agreement.
SECTION 13.16 Severability of Provisions. Any provision of this Agreement
--------------------------
or any other Loan Document which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective only to the extent
of such prohibition or unenforceability without invalidating the remainder of
such provision or the remaining provisions hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdiction.
SECTION 13.17 Counterparts. This Agreement may be executed in any number of
------------
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and shall be binding
upon all parties, their successors and assigns, and all of which taken together
shall constitute one and the same agreement.
SECTION 13.18 Company as Agent for the Borrowers. The Borrowers hereby
----------------------------------
irrevocably appoint and authorize the Company (i) to provide the Administrative
Agent with all notices with respect to Extensions of Credit obtained for the
benefit of any Borrower and all other notices and instructions under this
Agreement and the other Loan Documents and (ii) to take such action on behalf of
the Borrowers as the Company deems appropriate on its behalf to obtain
Extensions of Credit and to exercise such other powers as are reasonably
incidental to carry out the purposes of this Agreement and the other Loan
Documents.
SECTION 13.19 Obligations Joint and Several; Contribution
-------------------------------------------
(a) The Borrowers shall be jointly and severally liable for the
Obligations, however incurred. References to the Borrowers with respect to the
Obligations or any portion thereof shall mean each Borrower on a joint and
several basis.
(b) To the extent any Borrower is required, by reason of its Obligations
hereunder, to pay to the Administrative Agent or any Lender or to any other
Borrower an amount greater than the amount of the Extensions of Credit actually
made available to or for the account of such Borrower, such Borrower shall have
an enforceable right of contribution and indemnity against the remaining
Borrowers, and the remaining Borrowers shall be jointly and severally liable to
such Borrower, for repayment of the full amount of such excess payment. Such
Borrower shall be subrogated to any and all rights of the Administrative Agent
and the Lenders against the remaining Borrowers to the extent of such excess
payment. The rights of any Borrower to contribution, subrogation and indemnity
under this Section 13.19 or under Applicable Law shall in all events and all
respects be subject and subordinate to the rights of the Administrative Agent
and the Lenders under this Agreement and the other Loan Documents and subject to
the prior full, final and indefeasible payment to the Administrative Agent and
the Lenders of all Obligations.
80
(c) Notwithstanding anything to the contrary in this Agreement, the amount
of any Borrower's obligations under this Section 13.19 shall in all events be
limited to, but not in excess of, the maximum amount thereof not subject to
avoidance or recovery by operation of Applicable Law governing bankruptcy,
reorganization, receivership, arrangement, adjustment of debts, relief of
debtors, dissolution, insolvency, fraudulent transfers or conveyances or other
similar laws (including, without limitation, 11 U.S.C. (S)546, (S)547, (S)548,
(S)550 and other "avoidance" provisions of Title 11 of the United States Code)
applicable at any time to such Borrower and this Agreement.
SECTION 13.20 Term of Agreement. This Agreement shall remain in effect from
-----------------
the Closing Date through and including the date upon which all Obligations shall
have been indefeasibly and irrevocably paid and satisfied in full. The
Administrative Agent is hereby permitted to release all Liens on the Collateral
in favor of the Administrative Agent, for the ratable benefit of itself and the
Lenders, upon repayment of the outstanding principal of and all accrued interest
on the Loans, payment of all outstanding fees and expenses hereunder and the
termination of the Lender's Commitments. No termination of this Agreement shall
affect the rights and obligations of the parties hereto arising prior to such
termination.
[Signature Pages To Follow]
81
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed under seal by their duly authorized officers, all as of the day and
year first written above.
BORROWERS:
[CORPORATE SEAL] GLOBAL IMAGING SYSTEMS, INC., as Borrower
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: CFO, VP, Treasurer and Secretary
[CORPORATE SEAL] GLOBAL IMAGING OPERATIONS, INC., as Borrower
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: VP and Treasurer
[CORPORATE SEAL] GLOBAL IMAGING FINANCE COMPANY, as Borrower
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: CFO, VP, Treasurer and Secretary
[CORPORATE SEAL] AMERICAN PHOTOCOPY EQUIPMENT COMPANY OF PITTSBURGH, as
Borrower
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Assistant Secretary
[CORPORATE SEAL] ▇▇▇▇▇▇, INC., as Borrower
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
[Signatures Continued On The Following Page]
[CORPORATE SEAL] BUSINESS EQUIPMENT UNLIMITED, as Borrower
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Secretary and Treasurer
[CORPORATE SEAL] CAMERON OFFICE PRODUCTS, INC., as Borrower
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
[CORPORATE SEAL] CONNECTICUT BUSINESS SYSTEMS, INC., as Borrower
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: VP, Secretary and Treasurer
[CORPORATE SEAL] ▇▇▇▇▇▇ OFFICE PRODUCTS, INC., as Borrower
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Assistant Secretary and Assistant
Treasurer
[CORPORATE SEAL] COPY SERVICE AND SUPPLY, INC., as Borrower
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: VP and Assistant Secretary
[Signatures Continued On The Following Page]
[CORPORATE SEAL] DUPLICATING SPECIALTIES, INC., as
Borrower
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: VP, CFO, Asst. Secretary and Treasurer
[CORPORATE SEAL] EASTERN COPY PRODUCTS, INC., as Borrower
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: VP and Assistant Secretary
[CORPORATE SEAL] ELECTRONIC SYSTEMS, INC., as Borrower
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: VP and Assistant Secretary
[CORPORATE SEAL] ELECTRONIC SYSTEMS OF RICHMOND, INC., as Borrower
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: VP and Assistant Secretary
[CORPORATE SEAL] FELCO OFFICE SYSTEMS, INC., as Borrower
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------
Attest: Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
/s/ ▇. ▇▇▇▇▇ ▇▇▇▇ Title: VP and Secretary
-----------------
Assistant Secretary
[Signatures Continued On The Following Page]
[CORPORATE SEAL] QUALITY BUSINESS SYSTEMS, INC., as Borrower
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: VP, CFO, Treasurer and Asst. Secretary
[CORPORATE SEAL] SOUTHERN BUSINESS COMMUNICATIONS, INC., as Borrower
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: VP, Secretary and Treasurer
[Signatures Continued On The Following Page]
FIRST UNION NATIONAL BANK, as
Administrative Agent and as Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------------
Title: Vice President
------------------------------
[Signatures Continued On The Following Page]
SCOTIABANC INC., as Documentation Agent and
as Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Title: Relationship Manager
------------------------------
[Signatures Continued On The Following Page]
AMSOUTH BANK, as Lender
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Title: Vice President
------------------------------
[Signatures Continued On The Following Page]
SUNTRUST BANK, TAMPA BAY, as Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Title: Vice President
------------------------------
The Exhibits and Schedules to this Credit Agreement are not included with this
Quarterly Report on Form 10-Q. Global will provide these exhibits and schedules
upon the request of the Securities and Exchange Commission